Financial Services Bill committee day three

11 July 2012

The Financial Services Bill continued committee stage, line by line scrutiny of the bill, in the House of Lords yesterday (Tuesday 10 July).

Members of the Lords continued to debate the Financial Policy Committee (FPC) functions under Clause Three of the bill. Baroness Hayter of Kentish Town (Labour) opened the debate and presented Amendments 46, 49, 52 and 67.

She explained: 'These amendments seek to ensure that when the FPC gives directions to the Financial Conduct Authority (FCA) in the interests of financial stability, it does so in ways that do not conflict with the FCA's duty to uphold consumer protection, that the FPC must take note of any representations from the consumer panel, and that where such directions, or indeed recommendations, are given, the FCA reports back to the Financial Services Consumer Panel as well as to the FPC.'

Lord Flight (Conservative) moved Amendment 47A, which enables the FPC to give direction to the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).

He withdrew the amendment after Lord Sassoon (Conservative) explained: 'The government will in due course publish a consultation document with proposals for the composition of the FPC's initial toolkit, which will set out whether procedural requirements will be amended for any tools.'

Lord Eatwell (Labour) suggested a Financial Stability Advisory Panel in Amendment 89.

He said: 'The amendment suggests that we have this financial stability advisory panel providing that diversity of view from academics, perhaps from members of staff of international organisations such as the Bank for International Settlements, which is making a lot of the running in the development of macroprudential tools, and potentially from others who have particular skills in the analysis of systemic risk.'

Lord Eatwell withdrew the amendment and will return to the issue at later stages.

Lords moved on to examine Clause Four and presented some technical amendments relating to Bank of England. They explored how the new bill would fit with changes in European law, the new European Systemic Risk Board and European Supervisory Authorities. 

They discussed changes to Clause Five covering the strategic objective for the FCA.

Members continue line by line scrutiny on Wednesday 18 July on committee stage day four.

Committee stage day two: Tuesday 3 July

Committee stage day one: Tuesday 26 June

What is committee stage?

Detailed line by line examination of the separate parts (clauses and schedules) of the bill takes place during committee stage. Any member of the Lords can take part.

It usually starts no later than two weeks after the second reading and can last for one to eight days or more.

The day before committee stage starts, amendments (changes) are published in a marshalled list - in which all the amendments are placed in order. Amendments on related subjects are grouped together and a list (groupings of amendments) is published on the day.

During committee stage every clause of the bill has to be agreed to and votes on the amendments can take place. All proposed amendments can be discussed and there is no time limit, or guillotine, on discussion of amendments.

Last stage: Second reading

About the bill

The bill was introduced in the Lords at first reading on 23 May. Members will now debate general aspects of the bill during the second reading.

The bill will amend the Bank of England Act 1998, the Financial Services and Markets Act 2000 and the Banking Act 2009 to make provisions about financial services and markets. It will also exercise certain statutory functions relating to building societies, friendly societies and other mutual societies.

The Financial Services Bill will amend section 785 of the Companies Act 2006, enabling the Director of Savings to provide services to other public bodies.

Further information

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