Journal der 1131. Sondersitzung des Ständigen Rates
A body corporate with functions relating to financial guidance is established (the “single financial guidance body”).
Schedule 1 makes further provision about the single financial guidance body.
The name of the new body is to be determined by regulations made by the Secretary of State.
The regulations may—
amend any provision of this Part, or of any Act amended by this Part, so as to replace the words “single financial guidance body” with the name of the body;
make incidental, supplementary and consequential provision.
The power to make regulations under subsection (3) is exercisable by statutory instrument; and an instrument containing such regulations is subject to annulment in pursuance of a resolution of either House of Parliament.
The consumer financial education body is dissolved.
Schedule 2 makes provision about schemes for the transfer of staff, property, rights and liabilities—
from the Secretary of State and the Pensions Advisory Service Limited to the single financial guidance body;
from the consumer financial education body to the single financial guidance body and the devolved authorities.
The objectives of the single financial guidance body are—
to improve the ability of members of the public to make informed financial decisions,
to support the provision of information, guidance and advice in areas where it is lacking,
to secure that information, guidance and advice is provided to members of the public in the clearest and most cost-effective way (including having regard to information provided by other organisations),
to ensure that information, guidance and advice is available to those most in need of it (and to allocate its resources accordingly), bearing in mind in particular the needs of people in vulnerable circumstances, and
to work closely with the devolved authorities as regards the provision of information, guidance and advice to members of the public in Scotland, Wales and Northern Ireland.
The single financial guidance body must have regard to its objectives when it exercises its functions.
In this section “information, guidance and advice” means—
information and guidance on matters relating to occupational and personal pensions,
information and advice on debt, and
information and guidance designed to enhance people's understanding and knowledge of financial matters and their ability to manage their own financial affairs.
The single financial guidance body has the following functions—
the pensions guidance function;
the debt advice function;
the money guidance function;
the consumer protection function;
the strategic function.
The single financial guidance body also has the function of providing—
advice and assistance to the Secretary of State on matters relating to the functions listed in subsection (1), and
advice to the Secretary of State on the establishment of a debt respite scheme (see section 6).
The single financial guidance body may do anything that is incidental or conducive to the exercise of its functions.
The pensions guidance function is to provide, to members of the public, free and impartial information and guidance on matters relating to occupational and personal pensions.
The debt advice function is to provide, to members of the public in England, free and impartial information and advice on debt.
The money guidance function is to provide, to members of the public, free and impartial information and guidance designed to enhance people's understanding and knowledge of financial matters and their ability to manage their own financial affairs.
The consumer protection function is—
to notify the FCA where, in the exercise of its other functions, the single financial guidance body becomes aware of practices carried out by FCA-regulated persons (within the meaning of section 139A of the Financial Services and Markets Act 2000) which it considers to be detrimental to consumers, and
to consider the effect of unsolicited direct marketing on consumers of financial products and services, and, in particular—
from time to time publish an assessment of whether unsolicited direct marketing is, or may be, having a detrimental effect on consumers, and
advise the Secretary of State whether to make regulations under section 22 (unsolicited direct marketing: other consumer financial products etc).
Where the single financial guidance body provides information, guidance or advice to a person in pursuance of one of the functions mentioned in subsection (1)(a) to (c), it must consider whether the person would benefit from receiving information, guidance or advice in pursuance of any other of those functions (and it must ensure that SFGB delivery partners are under a similar duty).
The strategic function is to develop and co-ordinate a national strategy to improve—
the financial capability of members of the public,
the ability of members of the public to manage debt, and
the provision of financial education to children and young people.
In developing and co-ordinating the national strategy, the single financial guidance body must work with others, such as those in the financial services industry, the devolved authorities and the public and voluntary sectors.
As part of its pensions guidance function, the single financial guidance body must provide information and guidance for the purposes of helping a member of a pension scheme, or a survivor of a member of a pension scheme, to make decisions about what to do with the flexible benefits that may be provided to the member or survivor.
In subsection (1)—
references to a member, or a survivor of a member, of a pension scheme include a member, or a survivor of a member, of a pension scheme for which the PPF has assumed responsibility under Part 2 of the Pensions Act 2004 or Part 3 of the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)), but
in relation to such a member or survivor, the reference to the flexible benefits that may be provided is to be read as a reference to the money purchase benefits that may be provided by the PPF by virtue of sections 161 and 170 of that Act or Articles 145 and 154 of that Order.
In this section—
“state pension”, “basic retirement pension”, “additional retirement pension” and “state pension information” have the meaning given by section 238C of the Pensions Act 2004.
The OLC must provide the Treasury and the Lord Chancellor with all such information and other assistance as either of them may reasonably require for the purposes of, or otherwise in connection with, the exercise of their powers under this Part of this Schedule.
A transfer scheme may—
contain supplementary, incidental and consequential provision;
make transitory or transitional provision or savings;
make different provision for different purposes;
make provision subject to exceptions.
In this Schedule—
After the making of a regulated claims management activity order, rules which— are to be treated as having been made by the FCA by virtue of comparable provision in the Financial Services and Markets Act 2000.
were made by the Regulator by virtue of provision in or under Part 2 of the Compensation Act 2006, and
are designated by the FCA,
Paragraph 18 is subject to any express restriction on disclosure imposed by the data protection legislation (ignoring any restriction which allows disclosure if authorised by an enactment).
The rules may be modified by the FCA.
“the FOS” means the body corporate which administers the ombudsman scheme provided for in Part 16 of the Financial Services and Markets Act 2000 (see section 225 of that Act);
Paragraph 17 applies if the OLC fails to make a scheme under paragraph 13 in circumstances where the Lord Chancellor considers that it is necessary for such a scheme to be made.
The Lord Chancellor may, with the approval of the Treasury, the OLC, the FOS and the FCA, make a scheme for the transfer of property, rights and liabilities of the OLC to the FOS.
“the FOS” means the body corporate which administers the ombudsman scheme provided for in Part 16 of the Financial Services and Markets Act 2000 (see section 225 of that Act);
a pensions dashboard service within the meaning of section 238A of the Pensions Act 2004, or
The single financial guidance body may delegate any function conferred on it to— A committee may delegate any function conferred on it to—
The application of the single financial guidance body's seal must be authenticated by the signature of— A document appearing to be duly sealed or signed on behalf of the single financial guidance body is to be received in evidence and, unless the contrary is proved, is to be taken to be duly signed or sealed. This paragraph does not apply to Scotland.
The single financial guidance body is to consist of— The Secretary of State and the non-executive members must ensure, so far as practicable, that the number of non-executive members is at all times greater than the number of executive members.
The executive members are to be employees of the single financial guidance body. Executive members appointed under paragraph 6(1) are to be employed by the single financial guidance body on such terms and conditions, including those as to remuneration, as the Secretary of State may determine. Executive members appointed under paragraph 6(2) are to be employed by the single financial guidance body on such terms and conditions, including those as to remuneration, as the body may determine, with the approval of the Secretary of State. The single financial guidance body must— as the body may determine, with the approval of the Secretary of State.
A scheme under this Schedule may, in particular, make provision— Sub-paragraph (1)(b) does not apply to references in any of the following— In sub-paragraph (1)(b), “agreement” includes an agreement that is not in writing.
The Financial Services Act 2012 is amended as follows.
In Part 2 of Schedule 1 to the House of Commons Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert— “ The single financial guidance body. ”
an incorporated practice within the meaning given by section 34(1A)(c) of the Solicitors (Scotland) Act 1980;
Omit section 45 and Schedule 15 (the consumer financial education body).
In section 85 (relevant functions in relation to complaints scheme)—
in subsection (2)(a), after “legislative functions” insert “ and its standards review functions ”;
in subsection (4)—
in paragraph (c)(i), for “, 312J or 333K” substitute “ or 312J ”;
in paragraph (e), omit “or 333P(9)”;
omit paragraph (f).
After subsection (4) insert—
The single financial guidance body must provide a pensions dashboard service by means of which— may be requested by, and provided to, an individual or a person authorised by the individual.
information that the trustees or managers of a relevant occupational pension scheme are required to provide by—
regulations under section 238D(1)(a)(ii) of the Pensions Act 2004, or
regulations under Article 215D(1)(a)(ii) of the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)), and
information that specified authorised persons are required to provide by general rules under section 137FAA(1)(a)(ii) of the Financial Services and Markets Act 2000,
The single financial guidance body may, by means of its pensions dashboard service, provide information about—
state pensions,
basic and additional retirement pensions, ...
state pension information relating to an individual.
the Pension Protection Fund, including information relating to an individual, and
the financial assistance scheme, including information relating to an individual.
The single financial guidance body may carry out other functions relating to pensions dashboard services, including functions for which provision is made by—
regulations under section 238A of the Pensions Act 2004 or Article 215A of the Pensions (Northern Ireland) Order 2005 (qualifying pensions dashboard services),
regulations under section 238D of the Pensions Act 2004 or Article 215D of the Pensions (Northern Ireland) Order 2005 (information from occupational pension schemes), or
general rules under section 137FAA of the Financial Services and Markets Act 2000 (information from personal or stakeholder pension schemes).
The functions of the single financial guidance body referred to in subsections (1) to (3) are part of its pensions guidance function.
Subsections (1) to (4) are without prejudice to sections 3(4) and (8) and 4.
In this section—
The single financial guidance body may arrange for another person (a “primary SFGB delivery partner”) to carry out any of the following functions on its behalf—
the pensions guidance function;
the debt advice function;
the money guidance function.
A primary SFGB delivery partner may arrange for another person (a “secondary SFGB delivery partner”) to carry out any of the functions it is carrying out on behalf of the single financial guidance body.
A secondary SFGB delivery partner may arrange for another person to carry out any of the functions it is carrying out on behalf of the single financial guidance body, but only with the consent of the single financial guidance body.
Arrangements under this section may include provision as to payment to the SFGB delivery partner.
Arrangements under this section must include provision requiring an SFGB delivery partner to disclose information to the single financial guidance body or the FCA when requested to do so to enable the single financial guidance body or the FCA to exercise the functions set out in section 10 (monitoring and enforcement of standards).
The Secretary of State must, within three months of the establishment of the single financial guidance body, seek advice from the body on the establishment of a debt respite scheme.
A debt respite scheme is a scheme designed to do one or more of the following—
protect individuals in debt from the accrual of further interest or charges on their debts during the period specified by the scheme,
protect individuals in debt from enforcement action from their creditors during that period, and
help individuals in debt and their creditors to devise a realistic plan for the repayment of some or all of the debts.
The matters on which the Secretary of State may seek advice include (but are not limited to)—
the appropriate person to administer the scheme (and the single financial guidance body may recommend the creation of a new body for this purpose);
whether the scheme should apply in England only, or whether it should also apply in Wales or Northern Ireland (or both);
the scope and design of the scheme, for example—
the types of debtors and the types of debts it should cover;
the types of protections it should give;
the time period for which the protections should apply;
what the obligations on debtors and creditors should be during any period for which protections apply, including any period of a repayment plan;
the consequences of a failure by a debtor or a creditor to comply with a repayment plan;
how the scheme should work, for example—
how an application should be made for the protections given by the scheme;
suitable arrangements to keep creditors informed;
whether there should be a central register of persons admitted to the scheme;
how the scheme should be implemented.
The single financial guidance body must provide the advice sought within 12 months of its establishment.
The Secretary of State must publish the advice.
As soon as reasonably practicable after receiving advice from the single financial guidance body under section 6, the Secretary of State must consider whether to make regulations under this section.
After receiving advice from the single financial guidance body under section 6, the Secretary of State may make regulations establishing a debt respite scheme.
The regulations must take the advice into account.
The regulations may provide for the scheme to apply—
in England only,
in England and Wales,
in England and Northern Ireland, or
in England, Wales and Northern Ireland.
The regulations may include the following as part of the scheme so far as it applies in England and Wales—
provision about the involvement of creditors in the process of devising a plan for the repayment of some or all of an individual's debts;
provision to protect an individual, during the period of a repayment plan, from being required to repay a debt to which the plan applies otherwise than in accordance with the plan;
provision for an amount payable in respect of a debt in accordance with a repayment plan—
to be payable instead towards the costs of operating the repayment plan, other repayment plans or the debt respite scheme, and
to be treated, so far as paid towards those costs, as permanently reducing a debt to which the plan applies.
Regulations under this section may—
make different provision for different purposes,
make different provision for different areas,
make provision binding the Crown,
make incidental, supplemental, consequential, transitional or saving provision, and
apply to obligations entered into, or debts due to be repaid, before the regulations come into force.
Provision under subsection (5)(c) may amend any provision made by or under—
an Act of Parliament,
in the case where the regulations provide for the scheme to apply in Wales, a Measure or Act of the National Assembly for Wales, and
in the case where the regulations provide for the scheme to apply in Northern Ireland, Northern Ireland legislation.
Regulations under this section are to be made by statutory instrument.
An instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of —
each House of Parliament,
in the case where the regulations provide for the scheme to apply in Wales, the National Assembly for Wales, and
in the case where the regulations provide for the scheme to apply in Northern Ireland, the Northern Ireland Assembly.
The Secretary of State may issue guidance and give directions to the single financial guidance body about the exercise of its functions.
The Secretary of State must publish any directions that are given to the single financial guidance body.
The single financial guidance body must have regard to guidance, and comply with directions, given to it by the Secretary of State.
The single financial guidance body must from time to time set standards to be complied with by—
persons providing information or guidance in pursuance of the body's pensions guidance function,
persons providing information or advice in pursuance of the body's debt advice function, and
persons providing information or guidance in pursuance of the body's money guidance function.
Before finalising the standards, the single financial guidance body must obtain the approval of the FCA.
In determining whether to approve the standards, the FCA must have regard to the needs of people who are receiving, or who may seek to receive, the information, guidance or advice to which the standards will apply.
The single financial guidance body must publish the standards.
The single financial guidance body must monitor its own and SFGB delivery partners' compliance with the standards.
The FCA must, at least once in every three years, carry out a review of—
whether the standards continue to be appropriate, and
how the single financial guidance body is monitoring and enforcing the standards.
As soon as practicable after the FCA has completed its review, it must provide a report on the review to—
the single financial guidance body, and
the Secretary of State.
The report may contain recommendations to the single financial guidance body.
The Secretary of State may pay grants or make loans, or give any other form of financial assistance, to meet expenditure in connection with the establishment of the single financial guidance body (including expenditure incurred or expected to be incurred before the commencement of section 1).
The Secretary of State may pay grants or make loans, or give any other form of financial assistance, to the single financial guidance body for the purpose of enabling it to carry out its functions.
Financial assistance may be given under subsection (1) or (2) subject to any conditions the Secretary of State thinks appropriate (including conditions as to repayment).
In section 175(1) of the Pension Schemes Act 1993 (power to make regulations imposing levies to meet certain expenditure)—
omit the “or” at the end of paragraph (c), and
after paragraph (d) insertor .
In section 170(1) of the Pension Schemes (Northern Ireland) Act 1993 (power to make regulations imposing levies to meet certain expenditure)—
omit the “or” at the end of paragraph (c), and
after paragraph (d) insertor .
References in regulations made under section 175(1) of the Pension Schemes Act 1993 (including regulations in force before the commencement of this section) to “expenditure referred to in section 175(1) of the 1993 Act” are to be read as references to expenditure referred to in section 175(1) of the Pension Schemes Act 1993 as amended by this section.
References in regulations made under section 170(1) of the Pension Schemes (Northern Ireland) Act 1993 (including regulations in force before the commencement of this section) to “expenditure referred to in section 170(1) of the Act” are to be read as references to expenditure referred to in section 170(1) of the Pension Schemes (Northern Ireland) Act 1993 as amended by this section.
In the Financial Services and Markets Act 2000, after section 137S, insert—
The requirements for the FCA to consult, before making rules under section 137SA of the Financial Services and Markets Act 2000, contained in— may be satisfied by things done before the day on which this Act is passed.
section 137SA(4) of that Act, and
section 138I(1) of that Act,
Rules under section 137SA of the Financial Services and Markets Act 2000 may impose levies with a view to recovering expenses incurred by the FCA before the day on which this Act is passed.
In the Financial Services and Markets Act 2000, after section 137SA (inserted by section 13), insert—
The requirements for the FCA to consult, before making rules under section 137SB of the Financial Services and Markets Act 2000, contained in— may be satisfied by things done before the day on which this section comes into force.
section 137SB(4) of that Act, and
section 138I(1) of that Act,
Rules under section 137SB of the Financial Services and Markets Act 2000 may impose levies with a view to recovering expenses incurred by the FCA before the day on which this section comes into force.
It is an offence for a person to hold himself or herself out (or where the person is a body, to hold itself out) as providing information, guidance or advice on behalf of the single financial guidance body when that is not in fact the case.
It is a defence for a person charged with an offence under this section to prove that the person took all reasonable precautions and exercised all due diligence to avoid committing the offence.
A person guilty of an offence under this section is liable on summary conviction—
in England and Wales, to imprisonment for a term not exceeding 51 weeks or a fine, or both;
in Scotland, to imprisonment for a term not exceeding 12 months or a fine not exceeding level 5 on the standard scale, or both;
in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding level 5 on the standard scale, or both.
In relation to an offence committed before the commencement of section 281(5) of the Criminal Justice Act 2003, the reference in subsection (3)(a) to 51 weeks is to be read as a reference to 6 months.
Proceedings for an offence under this section may be instituted in England and Wales only by or with the consent of the Director of Public Prosecutions.
Proceedings for an offence under this section may be instituted in Northern Ireland only by or with the consent of the Director of Public Prosecutions for Northern Ireland.
If an offence under section 15 committed by a body corporate is proved— the officer, as well as the body corporate, is guilty of the offence and liable to be proceeded against and punished accordingly.
to have been committed with the consent or connivance of an officer of the body, or
to be attributable to any neglect on the part of such an officer,
In subsection (1) “officer”, in relation to a body corporate, means—
a director, member of the committee of management, chief executive, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity;
an individual who is a controller of the body.
If the affairs of a body corporate are managed by its members, subsection (1) applies in relation to the acts and defaults of a member in connection with the member's functions of management as if the member were a director of the body corporate.
If an offence under section 15 committed by a partnership is proved— the partner, as well as the partnership, is guilty of the offence and liable to be proceeded against and punished accordingly.
to have been committed with the consent or connivance of a partner, or
to be attributable to any neglect on the part of the partner,
In subsection (4) “partner” includes a person purporting to act as a partner.
If an offence under section 15 committed by an unincorporated association other than a partnership is proved— the officer or member, as well as the association, is guilty of the offence and liable to be proceeded against and punished accordingly.
to have been committed with the consent or connivance of an officer of the association or a member of its governing body, or
to be attributable to any neglect on the part of such an officer or member,
Proceedings for an offence under section 15 must be brought—
where the offence is alleged to have been committed by a partnership, against the partnership in the firm name;
where the offence is alleged to have been committed by any other type of unincorporated association, against the association in its own name.
Rules of court relating to the service of documents have effect in relation to such proceedings as if the partnership or unincorporated association were a body corporate.
The single financial guidance body may disclose information to the Secretary of State, and the Secretary of State may disclose information to the single financial guidance body, provided that the disclosure (in either case) is for the purpose of enabling or facilitating the exercise of—
a function of the single financial guidance body, or
a function of the Secretary of State that—
relates directly to the single financial guidance body, or
is the same as, or in a similar area to, a function of the single financial guidance body.
The single financial guidance body may disclose information to a devolved authority, and a devolved authority may disclose information to the single financial guidance body, provided that the disclosure (in either case) is for the purpose of enabling or facilitating—
the exercise of a function of the single financial guidance body, or
the provision of information and advice on debt to members of the public in Scotland, Wales or Northern Ireland.
The single financial guidance body may disclose information to the FCA, and the FCA may disclose information to the single financial guidance body, provided that the disclosure (in either case) is for the purpose of enabling or facilitating the exercise of—
a function of the single financial guidance body, or
a function of the FCA that—
relates directly to the single financial guidance body, or
is in a similar area to a function of the single financial guidance body.
A devolved authority may disclose information to the FCA, and the FCA may disclose information to a devolved authority, provided that the disclosure (in either case) is for the purpose of enabling or facilitating—
the provision of information and advice on debt to members of the public in Scotland, Wales or Northern Ireland, or
the exercise of a function of the FCA that relates to the provision of information or advice on debt.
The single financial guidance body may disclose information to an SFGB delivery partner, and an SFGB delivery partner may disclose information to the single financial guidance body, provided that the disclosure (in either case) is for the purpose of enabling or facilitating the exercise of a function that the SFGB delivery partner is carrying out on behalf of the single financial guidance body.
The single financial guidance body must disclose information—
to the Secretary of State, where requested to do so by the Secretary of State;
to the FCA, where—
the disclosure is for the purpose of enabling or facilitating the exercise of the consumer protection function, or
the FCA requests information for the purposes of a review under section 10 (monitoring and enforcement of standards).
A disclosure of information which is authorised or required by this section does not breach—
an obligation of confidence owed by the person making the disclosure, or
any other restriction on the disclosure of the information (however imposed).
But nothing in this section authorises the making of a disclosure which—
contravenes the data protection legislation, or
is prohibited by any of Parts 1 to 7 or Chapter 1 of Part 9 of the Investigatory Powers Act 2016.
Section 137FB of the Financial Services and Markets Act 2000 (FCA general rules: disclosure of information about the availability of pensions guidance) is amended as follows.
After subsection (1), insert—
In subsection (2), for “this section” substitute “ subsection (1) ”.
After subsection (2) insert—
In subsection (3), for “the rules” substitute “ rules to be made by virtue of subsection (1) ”.
After subsection (3) insert—
“pensions guidance” means information or guidance provided by any person in pursuance of the requirements mentioned in section 4 of the Financial Guidance and Claims Act 2018 (information etc about flexible benefits under pension schemes);
The Pension Schemes Act 1993 is amended as set out in subsections (2) to (5).
After section 113A insert—
In section 115 (powers as respects failure to comply with information requirements), in subsection (1), after “113” insert “ , 113B ”.
In section 182(5) (power of Treasury to direct that regulation-making powers are exercisable only in conjunction with them), after “except” insert “ regulations under section 113B or ”.
In section 185(2) (consultations about other regulations: exceptions), after paragraph (c) insert—.
The Pension Schemes (Northern Ireland) Act 1993 is amended as set out in subsections (7) to (9).
After section 109A insert—
In section 111 (powers as respects failure to comply with information requirements), in subsection (1), after “109” insert “ or 109B ”.
In section 177(6) (power of Department of Finance to direct that regulation-making powers are exercisable only in conjunction with them), after “except” insert “ regulations under section 109B or ”.
After section 137FBB of the Financial Services and Markets Act 2000 insert—
The Secretary of State may make regulations prohibiting unsolicited direct marketing relating to pensions.
The regulations may—
make provision about when a communication is to be, or is not to be, treated as unsolicited;
make provision for exceptions to the prohibition;
confer functions on the Information Commissioner and on OFCOM (including conferring a discretion);
apply (with or without modifications) provisions of the data protection legislation or the Privacy and Electronic Communications (EC Directive) Regulations 2003 (S.I. 2003/2426) (including, in particular, provisions relating to enforcement).
The regulations may—
make different provision for different purposes;
make different provision for different areas;
make incidental, supplementary, consequential, transitional or saving provision.
Regulations under this section are to be made by statutory instrument.
A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
If before the end of June in any year the Secretary of State has not made regulations under this section (whether or not in that year), the Secretary of State must—
publish a statement, by the end of July in that year, explaining why regulations have not been made and setting a timetable for making the regulations, and
lay the statement before each House of Parliament.
In this section, “OFCOM” means the Office of Communications established by section 1 of the Office of Communications Act 2002.
The Secretary of State must keep under review whether a prohibition on unsolicited direct marketing in relation to consumer financial products and services other than pensions would be appropriate.
If the Secretary of State considers that such a prohibition would be appropriate, the Secretary of State may make regulations applying regulations made under section 21 to other consumer financial products and services (with or without modifications).
In considering whether to make such regulations, the Secretary of State must take into account any advice received from the single financial guidance body under section 3(7)(b)(ii) (consumer protection function: advice on effect on consumers of unsolicited direct marketing).
The regulations may—
make different provision for different purposes;
make different provision for different areas;
make incidental, supplementary, consequential, transitional or saving provision.
Regulations under this section are to be made by statutory instrument.
A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
The Secretary of State must keep under review the question of whether the single financial guidance body should be dissolved.
If the Secretary of State considers that the single financial guidance body should be dissolved, he or she must carry out a public consultation.
If, after the period of 12 weeks beginning with the day on which the consultation began, the Secretary of State still considers dissolution of the single financial guidance body to be appropriate, he or she must lay before Parliament—
draft regulations, and
an explanatory document.
The draft regulations may in particular make provision about—
the transfer of the functions of the single financial guidance body to the Secretary of State or any other person;
the transfer of property, rights or liabilities of the single financial guidance body to the Secretary of State or any other person;
the creation and extinguishment of interests, rights and liabilities, in connection with provision made under paragraph (b);
the payment by the Secretary of State or the single financial guidance body of compensation to any person who suffers loss or damage as a result of the dissolution.
The draft regulations—
may transfer rights and liabilities relating to employees, but
may not affect the operation of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I. 2006/246).
The draft regulations may—
amend or repeal any provision of this Part;
make incidental, supplementary, consequential, transitional or saving provision.
Subsection (6)(b) includes the power to amend any provision made by or under—
an Act of Parliament,
an Act of the Scottish Parliament,
a Measure or Act of the National Assembly for Wales, or
Northern Ireland legislation.
The 40-day affirmative procedure applies to draft regulations under section 23 unless, within the period of 30 days beginning with the day on which the draft regulations were laid before Parliament— In either of those cases the super-affirmative procedure applies.
either House of Parliament resolves that the super-affirmative procedure should apply, or
a committee of either House charged with reporting on the draft regulations recommends that the super-affirmative procedure should apply and the House to which the recommendation is made does not by resolution reject the recommendation within that 30-day period.
Under the 40-day affirmative procedure, if after the expiry of the period of 40 days beginning with the day on which the regulations were laid before Parliament, the draft regulations are approved by a resolution of each House of Parliament, the Secretary of State may make regulations in the terms of the draft regulations.
Under the super-affirmative procedure, the Secretary of State must—
have regard to the matters mentioned in subsection (4), and
make the regulations in accordance with subsections (5) to (7).
The matters are— made in relation to the draft regulations during the period of 60 days beginning with the day on which the draft regulations were laid before Parliament.
any representations,
any resolution of either House of Parliament, and
any recommendation of a committee of either House of Parliament charged with reporting on the draft regulations,
If, after the expiry of that 60-day period, the draft regulations are approved by a resolution of each House of Parliament, the Secretary of State may make regulations in the terms of the draft regulations.
If, after the expiry of that 60-day period, the Secretary of State wishes to proceed with the draft regulations but with material changes, the Secretary of State may lay before Parliament—
revised draft regulations, and
a statement giving a summary of the changes proposed.
If the revised draft regulations are approved by a resolution of each House of Parliament, the Secretary of State may make regulations in the terms of the revised draft regulations.
Regulations are made in the terms of draft regulations (including revised draft regulations) if the regulations contain no material changes.
In calculating the periods of time referred to in this section, no account is to be taken of any time during which Parliament is dissolved or prorogued or during which either House is adjourned for more than four days.
The regulations are to be made by statutory instrument.
Schedule 3 contains amendments that relate to this Part.
In this Part—
“regulated claims management activity order” has the meaning given in paragraph 1(b).
Section 1
the performance of any ancillary functions in relation to such proceedings;
The single financial guidance body is not to be regarded— The members and employees of the single financial guidance body are not to be regarded as Crown servants.
Before appointing a person to be a non-executive member, the Secretary of State must be satisfied that the person does not have a conflict of interest. A non-executive member, or a person the Secretary of State proposes to appoint as a non-executive member, must provide the Secretary of State with such information as the Secretary of State requires from the person in order to determine whether the person has a conflict of interest (whether for the purposes of sub-paragraph (1) or paragraph 3(3)(a)). In this Schedule, “conflict of interest”, in relation to a person, means a financial or other interest which is likely to affect prejudicially the discharge by the person of his or her functions as a member or employee of the single financial guidance body, or as a member of a committee or sub-committee of the single financial guidance body.
Part 11 of the Financial Services and Markets Act 2000 (information gathering and investigations) has effect as if—
to the extent that they relate to a notice or authorisation of the FCA, the references in section 165(1), (3) and (7)(a) to an authorised person include a reference to a person falling within paragraph 2,
the reference in section 165(4)(a) to the exercise by either regulator of functions conferred on it under the Financial Services and Markets Act 2000 includes a reference to the steps taken, or to be taken, by the FCA in preparation for the conferral of functions on it by virtue of the making of an order under section 22(1B) of that Act (“a regulated claims management activity order”), and
the reference in section 166(2)(a) to an authorised person includes a reference to a person falling within paragraph 3.
A person falls within this paragraph if the person—
is or at any time was authorised under section 5(1)(a) of the Compensation Act 2006 (provision of regulated claims management services), or
is, or at any time was, providing services in Scotland which the person would be, or would have been, prohibited from providing in England and Wales by section 4(1) of the Compensation Act 2006 unless authorised under section 5(1)(a) of that Act.
A person falls within this paragraph if the person—
is authorised under section 5(1)(a) of the Compensation Act 2006 (provision of regulated claims management services), or
is providing services in Scotland which the person would be prohibited from providing in England and Wales by section 4(1) of the Compensation Act 2006 unless authorised under section 5(1)(a) of that Act.
“relevant occupational pension scheme” has the meaning given by—
A defect in appointment does not affect the validity of things done by a member of the single financial guidance body.
The non-executive members hold and vacate office in accordance with the terms of their appointment (subject to this Schedule). A non-executive member may resign by notice in writing to the Secretary of State. The Secretary of State may remove a non-executive member from office by notice if the Secretary of State is satisfied that the member—
Before the date on which the single financial guidance body first starts to provide services to members of the public, the Secretary of State must appoint— Appointments of executive members (including the chief executive) made on or after the date on which the single financial guidance body first starts to provide services to members of the public are to be made by the single financial guidance body, with the approval of the Secretary of State.
The single financial guidance body may— A committee may consist of or include persons who are neither members nor employees of the single financial guidance body. But a committee that discharges any functions of the single financial guidance body, by virtue of sub-paragraph (1)(a) or paragraph 10, must include at least one person who is either a member or an employee of the single financial guidance body. Where a person who is neither a member nor an employee of the single financial guidance body is a member of a committee, the body may pay to that person such remuneration and expenses as it may determine. A committee may establish a sub-committee. A sub-committee must include at least one person who is a member of the committee that established it. A sub-committee that discharges any functions of the single financial guidance body must include at least one person who is either a member or an employee of the single financial guidance body.
The Secretary of State may modify a scheme made under this Schedule; but a modification relating to a transfer that has taken effect may be made only with the agreement of the person (or persons) affected by the modification. A modification takes effect from such date as the Secretary of State may specify (which may be the date when the original scheme came into effect).
In Schedule 2 to the Parliamentary Commissioner Act 1967 (departments etc subject to investigation), at the appropriate place insert— “ The single financial guidance body. ”
The Financial Services and Markets Act 2000 is amended as follows.
The Secretary of State may, with the consent of the FCA, make one or more schemes for the transfer of property, rights and liabilities of the Regulator to the FCA.
A transfer scheme may—
contain supplementary, incidental and consequential provision;
make transitory or transitional provision or savings;
make different provision for different purposes;
make provision subject to exceptions.
In section 1A(6) (functions of the FCA), after paragraph (c) insert—.
In section 1B (FCA's general duties), omit subsection (7A).
In section 1C (the consumer protection objective), in subsection (2), omit paragraph (g).
In section 1M (FCA's general duty to consult), omit the words “and its duties under section 333O”.
In section 1S (reviews), in subsection (3) omit the words “or its duties under section 333O(1) and (2)(a)”.
In section 3R (arrangements for provision of services), in subsection (4), for paragraph (a) substitute—.
Omit section 3S (the consumer financial education body).
In section 138F (notification of rules), in subsection (2) (exceptions to notification)—
after “, 137FBA” insert “ , 137SA ”;
before “, 137SA” (inserted by paragraph (a)), insert “ , 137FC ”;
after “, 137SA” insert “ , 137SB ”;
omit “, 333Q, 333R”.
Section 138I (consultation on rules by FCA) is amended as follows. In subsection (6) (exception to requirement to carry out cost benefit analysis)— In subsection (10) (exception to requirement to consult PRA before making rules)—
In section 138J (consultation on rules by PRA), in subsection (6), omit paragraph (e).
In section 139A (power of FCA to give guidance), omit subsection (1A).
In section 140A (competition scrutiny: interpretation), in subsection (1), in paragraph (a) of the definition of “regulating provisions”—
in sub-paragraph (ii), omit “or 333P(9)”;
omit sub-paragraphs (v) and (vi).
In section 168 (appointment of persons to carry out investigations), in subsection (2)(a), omit “or 333G”.
Omit Part 20A (sections 333A to 333R; pensions guidance).
In section 429 (Parliamentary control of statutory instruments), in subsection (2), omit “, 333C, 333R”.
Schedule 1ZA (the Financial Conduct Authority) is amended as follows. In paragraph 8 (arrangements for discharging functions)— In paragraph 11 (annual report), in sub-paragraph (1)— In paragraph 21 (financial penalty scheme), in sub-paragraph (2)— In paragraph 23 (fees)—
Omit Schedule 1A (further provision about the consumer financial education body).
“survivor” has the meaning given by section 76(1) of the Pension Schemes Act 2015.
The single financial guidance body may regulate its own procedures (including quorum) and the procedures of its committees and sub-committees. The single financial guidance body's procedures must include arrangements for dealing with conflicts of interests of members, employees and members of committees and sub-committees, which must oblige a person who has or may have a conflict of interest— For the meaning of “conflict of interest” in this Schedule, see paragraph 4(3). The single financial guidance body must publish details of its procedures and the procedures of its committees and sub-committees. The single financial guidance body must make arrangements for the keeping of proper records—
As soon as reasonably practicable after the end of each financial year, the single financial guidance body must send to the Secretary of State a report on the exercise of the single financial guidance body's functions during that year. The report must include— On receiving the report, the Secretary of State must lay it before Parliament. The single financial guidance body must— The statement must be in such form as the Secretary of State may direct. The single financial guidance body must send a copy of the statement of accounts to— within the time period directed by the Secretary of State. The Comptroller and Auditor General must— The Secretary of State must lay before Parliament the statement of accounts and the report of the Comptroller and Auditor General. In this paragraph, “financial year” means—
The single financial guidance body may— as the Secretary of State may determine. Where— the single financial guidance body may make a payment to the person of such amount as the Secretary of State may determine.
The single financial guidance body may appoint other employees on such terms and conditions, including those as to remuneration and pension arrangements, as the single financial guidance body may determine.
The Financial Services Act 2010 is amended as follows.
In the Bank of England and Financial Services Act 2016, omit section 32 (amendments to section 333A of FSMA; pensions guidance).
Paragraphs 6 and 7 apply in connection with the making or issuing of any rules or other instrument or document relating to an activity—
of a kind specified in a regulated claims management activity order, or
of a kind specified in an order under section 21(10B) of the Financial Services and Markets Act 2000.
In section 2 (enhancing public understanding of financial matters etc), omit subsections (1) and (6).
Any requirement imposed on the FCA— may be satisfied by things done by the FCA before the coming into effect of the order or the passing of this Act.
to publish a draft of the rules or other instrument or document and invite representations about it, or
to consult particular persons,
Omit Schedule 1 (further provision about the consumer financial education body).
Section 138I of the Financial Services and Markets Act 2000 (consultation by the FCA) does not apply in relation to rules which make provision similar to any provision in or made under Part 2 of the Compensation Act 2006.
Section 1
foreign lawyers registered with the Law Society of Scotland under section 60A of the Solicitors (Scotland) Act 1980;
The Secretary of State may make one or more schemes providing for the transfer of designated property, rights and liabilities of the Secretary of State and the Pensions Advisory Service Limited to the single financial guidance body. The Secretary of State may make one or more schemes providing for the transfer of designated property, rights and liabilities of the consumer financial education body to the single financial guidance body and the devolved authorities. The rights and liabilities that may be transferred by a scheme include rights and liabilities under a contract of employment. For that purpose— In this Schedule—
A scheme may—
contain incidental, supplementary and consequential provisions;
make transitory or transitional provision or savings;
make different provision for different purposes;
make provision subject to exceptions.
Section 25
“the OLC” means the Office for Legal Complaints established by section 114 of the Legal Services Act 2007;
In Schedule 1 to the Public Records Act 1958 (definition of public records), in paragraph 3, in Part 2 of the Table, at the appropriate place insert— “ The single financial guidance body. ”
The single financial guidance body.
In Part 2 of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975 (bodies of which all members are disqualified), at the appropriate place insert— “ The single financial guidance body. ”
Subject to paragraph 11, the Secretary of State may, with the consent of the FCA, modify a transfer scheme.
The following provisions of this Part of this Schedule apply in relation to schemes under paragraph 3 (“transfer schemes”).
A modification relating to a transfer that has taken effect may be made only with the agreement of the person (or persons) affected by the modification.
The property, rights and liabilities which are the subject of a transfer scheme are transferred in accordance with the provisions of the scheme on such day as the scheme may specify.
A modification takes effect from such date as the Secretary of State may specify, and that date may be the date when the original scheme came into effect.
The property, rights and liabilities that may be the subject of a transfer scheme include—
any that would not otherwise be capable of being transferred or assigned,
rights and liabilities under a contract of employment, and
amounts in respect of fees paid under the Compensation (Claims Management Services) Regulations 2006 (S.I. 2006/3322).
For the purpose of paragraph 6(b)—
an individual who holds employment in the civil service of the State is to be treated as employed by virtue of a contract of employment, and
the terms on which the individual holds that employment are to be regarded as constituting the terms of that contract.
The single financial guidance body.
the Welsh Ministers, and
In Schedule 3 to the Pension Schemes Act 2015 (pensions guidance), omit paragraphs 2 to 5, 8(b), 9 to 11, 13 to 15 and 17.
Section 27
This Schedule applies if the Treasury make an order under section 22(1B) of the Financial Services and Markets Act 2000 which has the effect that an activity—
becomes a regulated activity for the purposes of that Act, and
ceases to be a regulated service under Part 2 of the Compensation Act 2006 (see section 4(2)(e) of that Act).
In this Schedule—
“the FCA” means the Financial Conduct Authority;
A transfer scheme may— An obligation of the FOS to make a compensation payment or to meet a liability transferred under provision in a transfer scheme is to be treated for the purposes of section 234 of the Financial Services and Markets Act 2000 (industry funding) as a cost of its operation in relation to the compulsory jurisdiction.
“conduct of litigation” means—
The following provisions of this Part of this Schedule apply in relation to schemes under paragraph 13 or 17 (“transfer schemes”).
Subject to paragraphs 26 to 28, the OLC may modify a transfer scheme.
A transfer scheme may— An obligation of the FCA to make a compensation payment or to meet a liability transferred under provision in a transfer scheme is to be treated for the purposes of paragraph 23 of Schedule 1ZA to the Financial Services and Markets Act 2000 (fees) as a qualifying function conferred on the FCA under that Act.
The Regulator may disclose to the FCA or the FOS any information which the Regulator considers that it is necessary or expedient to disclose to the FCA or, as the case may be, the FOS so that the FCA or the FOS can take steps in preparation for the conferral of functions on it as a result of the making of a regulated claims management activity order.
“the OLC” means the Office for Legal Complaints established by section 114 of the Legal Services Act 2007;
The property, rights and liabilities which are the subject of a transfer scheme are transferred in accordance with the provisions of the scheme on such day as the scheme may specify.
A modification relating to a transfer that has taken effect may be made only with the agreement of the person (or persons) affected by the modification.
Section 244 of the Enterprise Act 2002 (considerations relevant to disclosure of information) does not apply in relation to a disclosure under paragraph 10.
The property, rights and liabilities that may be the subject of a transfer scheme include—
any that would not otherwise be capable of being transferred or assigned, and
rights and liabilities under a contract of employment.
A modification is not to be capable of coming into effect unless it is approved by the Treasury and the Lord Chancellor.
The OLC may disclose to the FOS or the FCA any information which the OLC considers that it is necessary or expedient to disclose to the FOS or, as the case may be, the FCA so that the FOS or the FCA can take steps in preparation for the conferral of functions on it as a result of the making of a regulated claims management activity order.
The OLC may not submit a scheme to the Treasury or the Lord Chancellor for approval under paragraph 27 without the consent of the FOS and the FCA.
A modification takes effect from such date as the OLC may specify, and that date may be the date when the original scheme came into effect.
Section 27
“the pensions guidance function” has the meaning given in section 3(4);
“relevant claims management activity” means activity of a kind specified in an order under section 22(1B) of the Financial Services and Markets Act 2000 (regulated activities: claims management services), disregarding any exemption in that order for activities carried on by, through, or at the direction of, a legal practitioner;
The OLC may make one or more schemes for the transfer of property, rights and liabilities of the OLC to the FOS.
A scheme made under paragraph 13 is not to be capable of coming into force unless it is approved by the Treasury and the Lord Chancellor.
The OLC may not submit a scheme to the Treasury or the Lord Chancellor for approval under paragraph 14 without the consent of the FOS and the FCA.
“the Regulator” means the person designated under section 5(1) of the Compensation Act 2006 or, if no person is so designated, the Secretary of State;
Where a regulated claims management activity order is made which requires the OLC to continue to deal with complaints made to it on or before a date or event identified in the order—
the FCA is to reimburse the OLC for the cost it incurs in doing so, and
this reimbursement obligation is to be treated for the purposes of paragraph 23 of Schedule 1ZA to the Financial Services and Markets Act 2000 (fees) as a qualifying function conferred on the FCA under that Act.
“the strategic function” has the meaning given in section 3(9).
“the Regulator” means the person designated under section 5(1) of the Compensation Act 2006 or, if no person is so designated, the Secretary of State.
The FCA may, before the making of a regulated claims management activity order, take such steps as the FCA considers necessary or expedient in preparation for the conferral of functions on it as a result of the making of the order.
In this Part, other than in section 1(7)(a) and paragraph 1(1) of Schedule 2, references to the Secretary of State are to be read as references to the Secretary of State or the Treasury.
The Financial Services and Markets Act 2000 is amended as follows.
In section 1H (interpretation provisions for FCA's objectives)—
in subsection (2), at the end of paragraph (c) insert “ or to engage in claims management activity ”, and
“engage in claims management activity” has the meaning given in section 21;
In section 21 (restrictions on financial promotion)—
in subsection (1)—
the words from “to engage” to the end become paragraph (a), and
at the end of that paragraph insert, or ,
after subsection (10) insert—, and
after subsection (12) insert—
In section 22 (regulated activities)—
after subsection (1A) insert—, and
in subsection (3) for “subsection (1) or (1A)” substitute “ subsections (1) to (1B) ”.
In section 137R (financial promotion rules)—
in subsection (1), omit the “or” at the end of paragraph (a) and after that paragraph insert—, and
in subsection (6), for “has” substitute “ and “engage in claims management activity” have ”.
In section 234C (complaints to the FCA by consumer bodies)—
in subsection (1), after “financial services” insert “ or of a market in Great Britain for claims management services ”, and
in subsection (5)—
in paragraph (a), at the end insert “ (and “market in Great Britain” is to be construed accordingly) ”, and
in paragraph (b), after “financial services” insert “ , or of a market in Great Britain for claims management services, ”.
In section 234I (FCA's functions under Part 4 of the Enterprise Act 2002)—
in subsection (2)(b), after “services” insert “ or to the provision of claims management services in Great Britain ”, and
in subsection (6)(a), after “financial services” insert “ or in Great Britain of claims management services ”.
In section 234J(2) (FCA's functions under the Competition Act 1998), after “financial services” insert “ or relate to the provision of claims management services in Great Britain ”.
In section 234M(1) (function of keeping market under review), after “services” insert “ and the market in Great Britain for claims management services ”.
“regulated claims management activity” means activity of a kind specified in an order under section 22(1B) (regulated activities: claims management services);
After section 419 insert—
In section 429 (parliamentary control of statutory instruments)—
in subsection (1)(a) (orders subject to affirmative procedure), for “or 419” substitute “ , 419 or 419B ”,
in subsection (4)—
in paragraph (e), for “or (10)” substitute, “, (10) or (10B)”,
omit the “or” at the end of paragraph (f), and
after paragraph (g) insert; or , and
after subsection (7) insert—
In Schedule 2 (regulated activities)—
in paragraph 25 (order making power), in sub-paragraph (1)—
in the opening words for “or (1A)” substitute “ to (1B) ”;
in paragraph (f) at the end insert “ , including provision which applies (with or without modification) provision in this Act or other primary or subordinate legislation that relates to investment activity or financial services to a regulated activity that does not relate to investment activity or financial services. ”, and
in paragraph 26 (parliamentary control), in sub-paragraph (1) for “or (1A)” substitute “ to (1B) ”.
Schedule 4 contains provision about transfer schemes where an order is made under section 22(1B) of the Financial Services and Markets Act 2000 (inserted by subsection (4)(a)).
Schedule 5 contains transitional provision relating to this section.
The Financial Services and Markets Act 2000 is amended as set out in subsections (2) and (3).
After section 137FC (inserted by section 20) insert—
In section 138E(3) (contravention of rules which may make transaction void or unenforceable)—
omit the “or” at the end of paragraph (b), and
at the end of paragraph (c) insertor
This section and sections 30 to 32 make provision for a fee cap to apply in certain circumstances to charges for regulated services provided in connection with a PPI claim.
The following provisions explain terms used in those sections.
The fee cap applicable to the amount charged for regulated services provided in connection with a PPI claim is 20% of the amount recovered for the claimant in satisfaction of the claim. Accordingly, where nothing is recovered (whether or not a claim has been made or concluded) the fee cap is zero.
But the charging of a reasonable amount for work done for the claimant is not to be regarded as exceeding the fee cap for a PPI claim if—
the amount is charged for regulated services provided in connection with the claim,
no other amount is charged for those services,
the claimant has terminated the agreement governing the provision of such services (whether before or after the making of a claim), and
the termination was not achieved by the cancellation of the agreement during a cooling off period available to the claimant by right (whether conferred by the agreement or otherwise).
References to a claim are to a claim (however described) seeking compensation, restitution, repayment or any other financial remedy or relief, whether or not the claim is made or could be made by way of legal proceedings.
References to the amount charged for regulated services provided in connection with a PPI claim are references to a sum comprising all amounts charged for such services in connection with the claim (whether or not charged under a single agreement), exclusive of VAT.
References to the amount recovered for the claimant, in relation to a PPI claim, include a reference to any amount which (instead of being paid to or to the order of the claimant)—
is set off against a debt due from the claimant to the person against whom the claim is made, or
is paid to any person other than the claimant (whether a person providing regulated services in connection with the claim or any other person) with a view to discharging the whole or part of a debt due from the claimant.
In this section references to regulated services are—
so far as relevant for the purposes of section 30, to be read as referring to regulated claims management services,
so far as relevant for the purposes of section 31, to be read as referring to any service which is a regulated claims management activity, and
so far as relevant for the purposes of section 32, to be read as referring to any service which is a relevant claims management activity (within the meaning given by subsection (5) of that section).
“PPI claim” means a claim relating to the selling of payment protection insurance (whether it concerns amounts paid by the policyholder or otherwise).
“Regulated claims management services”—
does not include any reserved legal activities of the kind mentioned in section 12(1)(a) or (b) of the Legal Services Act 2007 (exercise of a right of audience or the conduct of litigation), but
otherwise, has the same meaning as in the Compensation Act 2006 (see section 14 of that Act).
“Regulated claims management activity” has the same meaning as in the Financial Services and Markets Act 2000 (see the definition inserted by this Act in section 417(1) of that Act).
“Section 22(1B) specified activity provisions” means provisions of an order made under section 22(1B) of the Financial Services and Markets Act 2000 (as inserted by this Act) which specify a kind of activity as a regulated activity within the meaning of that Act.
“The FCA” means the Financial Conduct Authority.
A regulated person —
must not charge a claimant, for regulated claims management services provided in connection with the claimant's PPI claim, an amount which exceeds the fee cap for the claim, and
must not enter into an agreement that provides for the payment by a claimant, for regulated claims management services provided in connection with the claimant's PPI claim, of charges which would breach, or are capable of breaching, the prohibition in paragraph (a).
A breach of either of those prohibitions is not actionable as a breach of statutory duty; but—
any payment in excess of the fee cap for a PPI claim is recoverable by the claimant, and
any agreement entered into in breach of subsection (1)(b) is not enforceable to the extent it provides for a payment that breaches or is capable of breaching the prohibition in subsection (1)(a).
In subsection (2) “payment” means a payment of charges for regulated claims management services provided in connection with the claim.
A relevant regulator—
must ensure that it has appropriate arrangements for monitoring and enforcing the prohibitions in subsection (1) as they apply to the regulated persons for whom it is the relevant regulator;
may make rules for the purposes of doing so (which may include provision applying, in relation to breaches of a prohibition in subsection (1), functions the relevant regulator has in relation to breaches of another restriction).
For the purposes of this section— Relevant regulator Regulated persons The Regulator Persons authorised to provide regulated claims management services under section 5(1)(a) of the Compensation Act 2006. The General Council of the Bar The Law Society of England and Wales The Chartered Institute of Legal Executives Persons authorised by the Institute to carry on a reserved legal activity.
“regulated person” means—
a person who falls within any category of regulated person specified in column 2 below, or
any person not within sub-paragraph (i) who, by virtue of article 4 of the Compensation (Exemptions) Order 2007 (S.I. 2007/209), is not prevented by section 4(1) of the Compensation Act 2006 from providing regulated claims management services;
“relevant regulator” means a person listed in column 1 below; and
the regulated persons for whom a person listed in column 1 below is the relevant regulator are described in the corresponding entry or entries in column 2.
In column 1 “the Regulator” means the person designated under section 5(1) of the Compensation Act 2006, or, if no person is so designated, the Secretary of State.
In column 2 “reserved legal activity” has the meaning given by section 12 of the Legal Services Act 2007.
This section applies as follows—
the prohibition in subsection (1)(a) applies only to charges imposed under an agreement entered into during the first interim period, and
the prohibition in subsection (1)(b) applies only to agreements entered into during that period.
In subsection (8) “the first interim period” is the period—
beginning with the day on which this section comes into force, and
ending with the day before the day on which the first section 22(1B) specified activity provisions come into force for (or for purposes which include) the purposes of the general prohibition in section 19 of the Financial Services and Markets Act 2000.
The rule specified in subsection (2) is to be treated for the purposes of the Financial Services and Markets Act 2000 as if— and accordingly functions conferred on the FCA by that Act which apply in relation to general rules made under section 137A apply to that rule as they apply to other general rules made under that section.
the rule were a general rule made by the FCA under section 137A of that Act, and
this section were contained in that Act;
The rule is that an authorised person—
must not charge a claimant, for a service which is a regulated claims management activity provided in connection with the claimant's PPI claim, an amount which exceeds the fee cap for the claim, and
must not enter into an agreement that provides for the payment by a claimant, for a service which is a regulated claims management activity provided in connection with the claimant's PPI claim, of charges which would breach, or are capable of breaching, the prohibition in paragraph (a).
A breach of either of those prohibitions is not actionable as a breach of statutory duty (despite section 138D(2) of the Financial Services and Markets Act 2000); but—
any payment in excess of the fee cap for a PPI claim is recoverable by the claimant, and
any agreement entered into in breach of the prohibition in subsection (2)(b) is not enforceable to the extent it provides for a payment that breaches or is capable of breaching the prohibition in subsection (2)(a).
In subsection (3) “payment” means a payment of charges for a service which is a regulated claims management activity provided in connection with the claim.
The rule in subsection (2) applies as follows—
the prohibition in paragraph (a) applies only to charges imposed under an agreement which is entered into during the second interim period, and
the prohibition in paragraph (b) applies only to agreements entered into during that period.
In subsection (5) “the second interim period” is the period—
beginning with the day on which the first section 22(1B) specified activity provisions come into force for (or for purposes which include) the purposes of the general prohibition in section 19 of the Financial Services and Markets Act 2000, and
ending with the day before the coming into force of the first relevant general rule made by the FCA (whether for all purposes or for any specific purpose).
In subsection (6)(b) “relevant general rule” means a general rule that—
is made under subsection (1) of section 137FD of the Financial Services and Markets Act 2000 (as inserted by this Act), and
applies to, or to any description of, PPI claims (whether or not it also applies to anything else).
In this section “authorised person” has the same meaning as in the Financial Services and Markets Act 2000 (see section 31(2) of that Act).
A legal practitioner—
must not charge a claimant, for a service which is a relevant claims management activity provided in connection with the claimant's PPI claim, an amount which exceeds the fee cap for the claim, and
must not enter into an agreement that provides for the payment by a claimant, for a service which is a relevant claims management activity provided in connection with the claimant's PPI claim, of charges which would breach, or are capable of breaching, the prohibition in paragraph (a).
Subsections (2) to (5) and (7) of section 30 apply for the purposes of the prohibitions in subsection (1) as they apply for the purposes of the prohibitions in section 30(1) but as if—
references in those subsections to “regulated claims management services” were references to “relevant claims management activity” and references to “regulated persons” were references to “legal practitioners”, and
the first entry in columns 1 and 2 of the table in subsection (5) were omitted.
Subsection (1) applies as follows—
the prohibition in subsection (1)(a) applies only to charges imposed by a legal practitioner under an agreement entered into during the period—
beginning with the first day of the second interim period (within the meaning given by section 31(6)), and
ending with the end date for that practitioner, and
the prohibition in subsection (1)(b) applies only to agreements entered into by a legal practitioner during that period.
For the purposes of subsection (3), the end date is—
for a legal practitioner for whom the relevant regulator is the Law Society of England and Wales, the day before the coming into force of the first rule made by the Law Society of England and Wales under section 33 that applies to, or to any description of, PPI claims, and
for any other legal practitioner, 29 April 2020.
In this section “relevant claims management activity”—
does not include any reserved legal activities of the kind mentioned in section 12(1)(a) or (b) of the Legal Services Act 2007 (exercise of a right of audience or the conduct of litigation), but
otherwise, means activity of a kind specified in an order under section 22(1B) of the Financial Services and Markets Act 2000 (regulated activities: claims management services), disregarding any exemption in that order for activities carried on by, through, or at the direction of, a legal practitioner.
The Law Society of England and Wales, the General Council of the Bar and the Chartered Institute of Legal Executives may make rules prohibiting regulated persons from—
entering into a specified relevant claims management agreement that provides for the payment by a person of specified charges, and
imposing specified charges on a person in connection with the provision of a service which is, or which is provided in connection with, a specified relevant claims management activity.
The Law Society of England and Wales must exercise that power to make rules in relation to all relevant claims management agreements, and all relevant claims management activities, which concern claims in relation to financial products or services.
The Law Society of Scotland may make rules prohibiting regulated persons from—
entering into a relevant claims management agreement concerning a claim in relation to a financial product or service that provides for the payment by a person of specified charges, and
imposing specified charges on a person in connection with the provision of a service which is, or which is provided in connection with, a relevant claims management activity concerning a claim in relation to a financial product or service.
Rules under this section may make provision securing that for the purposes of the prohibition referred to in subsection (1)(a) or (3)(a) charges payable under a relevant claims management agreement are to be treated as including charges payable under an agreement treated by the rules as being connected with the relevant claims management agreement.
In this section “regulated persons” means—
in relation to the Law Society of England and Wales—
persons who, or licensable bodies which, are authorised by the Law Society to carry on a reserved legal activity,
European lawyers registered with the Law Society under the European Communities (Lawyer's Practice) Regulations 2000 (S.I. 2000/1119) , as they have effect by virtue of regulation 6 of the Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020, and
foreign lawyers registered with the Law Society under section 89 of the Courts and Legal Services Act 1990;
in relation to the Law Society of Scotland, Scottish legal practitioners;
in relation to the General Council of the Bar—
persons who, or licensable bodies which, are authorised by the General Council to carry on a reserved legal activity, and
European lawyers registered with the General Council under the European Communities (Lawyer's Practice) Regulations 2000 , as they have effect by virtue of regulation 6 of the Services of Lawyers and Lawyer’s Practice (Revocation etc.) (EU Exit) Regulations 2020;
in relation to the Chartered Institute of Legal Executives, persons authorised by the Institute to carry on a reserved legal activity.
The rules must be made with a view to securing an appropriate degree of protection against excessive charges for the provision of a service which is, or which is provided in connection with, a relevant claims management activity.
The rules may specify charges by reference to charges of a specified class or description, or by reference to charges which exceed, or are capable of exceeding, a specified amount.
The rules may not specify—
charges for a reserved legal activity within the meaning of the Legal Services Act 2007 (see section 12 of that Act);
charges imposed in respect of—
the exercise of a right of audience by a Scottish legal practitioner;
the conduct of litigation by a Scottish legal practitioner.
In subsection (8)(b)—
In relation to an agreement entered into, or charge imposed, in contravention of the rules, the rules may (amongst other things)—
provide for the agreement, or obligation to pay the charge, to be unenforceable or unenforceable to a specified extent;
provide for the recovery of amounts paid under the agreement or obligation;
provide for the payment of compensation for any losses incurred as a result of paying amounts under the agreement or obligation.
For the purposes of this section—
“relevant claims management agreement” means an agreement, the entering into or performance of which by either party is a relevant claims management activity;
This section does not limit any power of the Law Society of England and Wales, the Law Society of Scotland, the General Council of the Bar or the Chartered Institute of Legal Executives existing apart from this section to make rules.
The Treasury may by regulations amend section 33 for the purpose of extending the power in subsection (3) of that section so as to apply to—
all relevant claims management agreements;
all relevant claims management activity;
any description of relevant claims management agreement;
any description of relevant claims management activity.
The Treasury must obtain the consent of the Scottish Ministers before making regulations under subsection (1).
Regulations under this section—
are to be made by statutory instrument;
may make incidental, supplemental or consequential provision.
A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.
The Privacy and Electronic Communications (EC Directive) Regulations 2003 (S.I. 2003/2426) are amended as follows.
In regulation 21 (calls for direct marketing purposes), after paragraph (5) insert—
After regulation 21 insert—
In regulation 24 (information to be provided for the purposes of regulations 19 to 21)—
in the heading, for “, 20 and 21” substitute “ to 21A ”;
in paragraph (1)(b), after “21” insert “ or 21A ”.
Part 1, other than the provisions mentioned in subsections (2) to (5), extends to England and Wales, Scotland and Northern Ireland.
Sections 6 and 7 extend to England and Wales and Northern Ireland.
In section 12—
subsections (1) and (3) extend to England and Wales and Scotland;
subsections (2) and (4) extend to Northern Ireland.
In section 19—
subsections (1) to (5) extend to England and Wales and Scotland;
subsections (6) to (9) extend to Northern Ireland.
Paragraph 24 of Schedule 3 extends to England and Wales and Scotland.
Part 2, other than the provisions mentioned in subsections (7) and (8), extends to England and Wales and Scotland.
The following provisions extend to England and Wales—
section 27(14) and Schedule 4;
section 30;
section 32.
Section 35 extends to England and Wales, Scotland and Northern Ireland.
This Part extends to England and Wales, Scotland and Northern Ireland.
The following provisions come into force on the day this Act is passed—
section 11(1) and (3);
section 12;
section 13;
section 21;
the following paragraphs of Schedule 3 (and section 25 so far as it relates to those paragraphs)—
paragraph 5,
paragraph 13(a),
paragraph 14(1), (2)(a) and (3)(a), and
paragraph 21(1), (5)(a)(i) and (5)(b)(iii);
section 27(15) and Schedule 5;
this Part.
Subsections (6) to (9) of section 19 come into force on a day appointed by order made by the Department for Communities in Northern Ireland.
An order under subsection (2) may make— and the power to make such an order is exercisable by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)).
transitional, transitory and saving provision in connection with the coming into force of any provision in section 19(6) to (9);
incidental and supplementary provision, and
different provision for different purposes,
Sections 22 and 29 to 32 come into force at the end of the period of two months beginning with the day on which this Act is passed.
The other provisions of this Act come into force on a day appointed by regulations.
Regulations under subsection (5) must provide for sections 6 and 7 to come into force on the same day as section 1(1).
Regulations may make transitional, transitory and saving provision in connection with the coming into force of any provision of Part 1 or 2 except section 19(6) to (9).
Regulations under subsection (5) or (7) may make—
incidental and supplementary provision,
different provision for different purposes, and
different provision for different areas.
Regulations under subsection (5) or (7) are to be made by statutory instrument by—
the Secretary of State, in relation to—
any provision of Part 1, other than section 14 and section 20, and
section 35;
the Treasury, in relation to—
sections 14 and 20, and
any provision of Part 2, other than section 35.
The Treasury must obtain the consent of the Lord Chancellor before making regulations under subsection (5) or (7) in relation to section 33.
This Act may be cited as the Financial Guidance and Claims Act 2018.