Moved by
Lord Deighton
3: After Clause 8, insert the following new Clause—
“Independent review of proprietary trading
(1) The Treasury must, after receiving the report of the PRA under section (PRA review of proprietary trading) but before the end of the initial period, appoint one or more persons (“the review panel”) to carry out a review of proprietary trading engaged in (whether or not as a regulated activity) by relevant authorised persons.
(2) The initial period is the period of 2 years beginning with the first day on which section 142G of FSMA 2000 is fully in force.
(3) The members of the review panel must be persons—
(a) who appear to the Treasury to be independent of the PRA, the FCA, the Bank of England and the Treasury, and
(b) who do not appear to the Treasury to have any financial or other interests that could reasonably be regarded as affecting their suitability to serve as members of the review panel.
(4) In appointing the members of the review panel, the Treasury must have regard to the need to ensure that the review panel (considered as a whole) has the necessary experience to undertake the review.
(5) Before appointing the members of the review panel, the Treasury must consult the chair of the Treasury Committee of the House of Commons.
(6) The reference in subsection (5) to the Treasury Committee of the House of Commons—
(a) if the name of that Committee is changed, is a reference to that Committee by its new name, and
(b) if the functions of that Committee (or substantially corresponding functions) become functions of a different Committee of the House of Commons, is to be treated as a reference to the Committee by which the functions are exercisable;
and any question arising under paragraph (a) or (b) is to be determined by the Speaker of the House of Commons.
(7) If the review panel consists of two or more members, the Treasury must appoint one of them to be the chair of the panel.
(8) The review panel must, within a reasonable time after the end of the initial period, make a written report to the Treasury—
(a) stating whether the panel agrees with the conclusions reached by the PRA in its report under section (PRA review of proprietary trading),
(b) stating whether the panel recommends any further restrictions on any kind of proprietary trading in relation to relevant authorised persons, and
(c) making such other recommendations as the panel thinks fit.
(9) The Treasury must—
(a) lay a copy of the report before Parliament, and
(b) publish the report in such manner as they think fit.
(10) Any expenses reasonably incurred in the conduct of the review are to be paid by the Treasury out of money provided by Parliament.
(11) This section is to be read with the interpretative provisions in section (Reviews of proprietary trading: interpretation).”
4: After Clause 8, insert the following new Clause—
“Reviews of proprietary trading: interpretation
(1) This section has effect for the interpretation of sections (PRA review of proprietary trading) and (Independent review of proprietary trading).
(2) A person engages in “proprietary trading” where the person trades in commodities or financial instruments as principal.
(3) In subsection (2)—
(a) “commodity” includes any produce of agriculture, forestry or fisheries, or any mineral, either in its natural state or having undergone only such processes as are necessary or customary to prepare the produce or mineral for the market;
(b) “financial instrument” includes anything specified in Section C of Annex I to Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments.
(4) “Relevant authorised person” means a PRA-authorised person which—
(a) is a UK institution,
(b) meets condition A or B, and
(c) is not an insurer.
(5) Condition A is that the UK institution has permission under Part 4A of FSMA 2000 to carry on the regulated activity of accepting deposits.
(6) Condition B is that—
(a) the institution is for the purposes of FSMA 2000 an investment firm (see section 424A of that Act),
(b) it has permission under Part 4A to carry on the regulated activity of dealing in investments as principal, and
(c) when carried on by it, that activity is a PRA-regulated activity.
(7) In subsections (4) to (6)—
(a) “UK institution” means an institution which is incorporated in, or formed under the law of any part of, the United Kingdom;
(b) “insurer” means an institution which is authorised under FSMA 2000 to carry on the regulated activity of effecting or carrying out contracts of insurance as principal;
(c) “PRA-authorised person” and “PRA-regulated activity” have the same meaning as in FSMA 2000.
(8) Subsections (5), (6)(b) and (7)(b) are to be read in accordance with section 22 of FSMA 2000, taken with Schedule 2 to that Act and any order under that section.”