The Commons Library has published two briefing papers which highlight the progress of this Bill through the House of Lords and into the House of Commons.
The Bill amends the governance and accountability of the Bank of England and includes changes to the Prudential Regulation Authority. The Bill extends the Pension Wise scheme and changes the rules on issuing of banknotes in Scotland and Northern Ireland.
The second reading of the Bill is scheduled for 1 February 2016.
Governance and financial arrangements
The Bill makes changes to the Bank’s governance and the role of the National Audit Office (NAO) in scrutinising the Bank.
In particular, the Bill abolishes the Bank’s Oversight Committee. This committee is made up of the non-executive members of the Bank’s board of directors, known as the court. The Oversight Committee’s functions are transferred to the court.
The Bill also allows the NAO to undertake value for money studies of the Bank as a whole for the first time. The Bill sets out the areas the NAO may look into.
The functions of the PRA will now be exercised through a new Prudential Regulation Committee.
The second main theme of the Bill is concerned with aspects of the UK’s financial supervisory and regulatory system. This Part of the Bill is significantly changed from when it was introduced in the Lords due to a number of government new clauses introduced on Report.
Authorised person’s regime
The clauses in this part of the Bill (clauses 20 to 24), were the most contested in the Lords’ debates. The clauses in the Bill do two main things.
- Extend the regime to all financial service providers
- Reverse the ‘burden of proof’ requirement
The Bill extends aspects of personal responsibility to all financial service providers and requires the regulator to prove misconduct. The main argument for the change is that it would be unfair to require small financial service firms, to have to prove they had done nothing wrong.
The argument against was that it makes the prosecution of individuals at the top of organisations highly unlikely. Actual personal culpability was one of the central recommendations of the Banking Commission.
The Bill contains three clauses relating to pension advice and guidance.
- provide for the remit of Pension Wise to cover individuals with a “relevant interest in relation to a relevant annuity”
- provide for a requirement to take advice for certain individuals seeking to assign their right to payments from an annuity to a third party
- allow ‘appointed representatives’ to advise on the conversion and transfer of safeguarded benefits
Content list of briefing papers
Briefing prior to second reading in Commons
- Governance and financial arrangements
- Financial services
- Authorised person’s regime
- Pensions guidance and advice
Briefing paper on Lords stages
- Summary of main points of the Bill
- Lords Second Reading debate
- Lords Committee stage
- Lords Report stage
Tracking this Bill
Keep up to date with the progress of this Bill as it proceeds through Parliament.