Financial Services Act 2010

Citation2010 c. 28
JurisdictionUK Non-devolved


Financial Services Act 2010

2010 CHAPTER 28

An Act to make provision amending the Financial Services and Markets Act 2000, including provision about financial education, and other provision about financial services and markets; and to make provision for the administration of court funds by the Director of Savings.

[8th April 2010]

Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:-

Objectives of FSA etc

Objectives of FSA etc

S-1 Financial stability objective

1 Financial stability objective

(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) In section 2(2) (the FSA's regulatory objectives), after paragraph (a) insert-

"(ab) financial stability;".

(3) After section 3 insert-

"3A Financial stability

(1) The financial stability objective is: contributing to the protection and enhancement of the stability of the UK financial system.

(2) In considering that objective the Authority must have regard to-

(a) the economic and fiscal consequences for the United Kingdom of instability of the UK financial system;

(b) the effects (if any) on the growth of the economy of the United Kingdom of anything done for the purpose of meeting that objective; and

(c) the impact (if any) on the stability of the UK financial system of events or circumstances outside the United Kingdom (as well as in the United Kingdom).

(3) The Authority must, consulting the Treasury, determine and review its strategy in relation to the financial stability objective."

S-2 Enhancing public understanding of financial matters etc

2 Enhancing public understanding of financial matters etc

(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) In section 2 (the FSA's general duties)-

(a) in subsection (2) (the FSA's regulatory objectives), omit paragraph (b) (which provides that public awareness is one of those objectives), and

(b) in subsection (3) (matters to which FSA must have regard in discharging its general functions), after paragraph (g) insert-

"(h) the desirability of enhancing the understanding and knowledge of members of the public of financial matters (including the UK financial system)."

(3) Omit section 4 (public awareness).

(4) In section 5(2) (the protection of consumers), after paragraph (b) insert-

"(ba) any information which the consumer financial education body has provided to the Authority in the exercise of the consumer financial education function;".

(5) After section 6 insert-

"Enhancing public understanding of financial matters etc

6A Enhancing public understanding of financial matters etc

(1) The Authority must establish a body corporate ("the consumer financial education body") whose function ("the consumer financial education function") is to enhance-

(a) the understanding and knowledge of members of the public of financial matters (including the UK financial system); and

(b) the ability of members of the public to manage their own financial affairs.

(2) The consumer financial education function includes, in particular-

(a) promoting awareness of the benefits of financial planning;

(b) promoting awareness of the financial advantages and disadvantages in relation to the supply of particular kinds of goods or services;

(c) promoting awareness of the benefits and risks associated with different kinds of financial dealing (which includes informing the Authority and other bodies of those benefits and risks);

(d) the publication of educational materials or the carrying out of other educational activities; and

(e) the provision of information and advice to members of the public.

(3) Schedule 1A makes further provision about the consumer financial education body."

(6) After Schedule 1 insert the Schedule 1A set out in Schedule 1 to this Act.

(7) If members of staff of the FSA are transferred to the consumer financial education body, the transfer is to be regarded for the purposes of TUPE as a relevant transfer, whether or not it would otherwise be so regarded.

(8) In subsection (7) -

"the consumer financial education body" has the same meaning as in section 6A of the Financial Services and Markets Act 2000,

"the FSA" means the Financial Services Authority, and

"TUPE" means the Transfer of Undertakings (Protection of Employment) Regulations 2006.

S-3 Meeting FSA's regulatory objectives

3 Meeting FSA's regulatory objectives

(1) The Financial Services and Markets Act 2000 is amended as follows.

(2) In section 44(3) (refusal of application by authorised person to vary or cancel its Part IV permission), for the words from "to it-" to the end substitute "to it that it is desirable to refuse the application in order to meet any of its regulatory objectives."

(3) In section 45 (variation or cancellation of Part IV permissions: FSA's own-initiative power)-

(a) in subsection (1), for paragraph (c) substitute-

"(c) it is desirable to exercise the power in order to meet any of its regulatory objectives.", and

(b) after that subsection insert-

"(1A) For the purposes of subsection (1)(c) it does not matter whether there is a relationship between the authorised person and the persons whose interests will be protected by the exercise of the power under this section."

(4) In section 138(1) and (1A) (general rule-making power), for "protecting the interests of consumers" substitute "meeting any of its regulatory objectives".

(5) In section 194 (general grounds on which power of intervention is exercisable)-

(a) in subsection (1), for paragraph (c) substitute-

"(c) it is desirable to exercise the power in order to meet any of its regulatory objectives.", and

(b) after that subsection insert-

"(1A) For the purposes of subsection (1)(c) it does not matter whether there is a relationship between the incoming firm and the persons whose interests will be protected by the exercise of the power of intervention."

Remuneration of executives of authorised persons

Remuneration of executives of authorised persons

S-4 Executives' remuneration reports

4 Executives' remuneration reports

(1) The Treasury may make provision by regulations about the preparation, approval and disclosure of executives' remuneration reports.

(2) An executives' remuneration report is a report containing information about-

(a) the remuneration of relevant executives of an authorised person, or

(b) anything connected with the remuneration of relevant executives of an authorised person.

(3) The following are relevant executives of an authorised person-

(a) officers of the authorised person,

(b) employees of the authorised person who fall within a prescribed description, and

(c) other individuals who have a prescribed connection with the authorised person.

(4) The individuals who may fall within subsection (3)(c) include any description of-

(a) individuals who provide services, or whose services are provided (directly or indirectly), to the authorised person, or

(b) individuals who are officers or employees of a member of the same group as the authorised person.

(5) Regulations under this section may apply in relation to a prescribed description of authorised person.

(6) Regulations under this section are subject to affirmative resolution procedure.

S-5 Executives' remuneration reports: supplementary

5 Executives' remuneration reports: supplementary

(1) Regulations under section 4 may, in particular, make provision as to-

(a) the information that must be contained in an executives' remuneration report,

(b) how information is to be set out in the report, and

(c) what is to be the auditable part of the report.

(2) The information that may be required to be contained in an executives' remuneration report includes-

(a) information corresponding to information that could be required by regulations under section 421 of the Companies Act 2006 to be contained in a directors' remuneration report, and

(b) information comparing the remuneration of relevant executives of an authorised person with the remuneration of employees of the authorised person who fall within a prescribed description.

(3) Regulations under section 4 may, in particular, make provision -

(a) for the filing of executives' remuneration reports with the registrar of companies for any part of the United Kingdom or with the FSA, and

(b) for the publication by the FSA of reports filed with it.

(4) Regulations under section 4 may apply any provision made by or under the Companies Act 2006 relating to directors' remuneration reports, subject to such exceptions, adaptations and modifications as the Treasury consider appropriate.

(5) The provisions that may be applied include provisions creating offences; but the regulations may not impose a liability for an offence which is more onerous than the liability for the offence under the applied provision.

(6) Regulations under section 4 may provide that any requirement imposed on an authorised person by the regulations is to be treated for the purposes of prescribed provisions of the Financial Services and Markets Act 2000 as if it had been imposed on the person by a provision of that Act.

(7) For the purposes of section 4 and this section-

"authorised person" has the same meaning as in the Financial Services and Markets Act 2000 (see section 31),

"the FSA" means the Financial Services Authority,

"group" has the same meaning as in the Financial Services and Markets Act 2000 (see section 421),

"officer"- (a) in relation to a partnership, means a partner, and (b) in relation to a body corporate whose...

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