Financial Services and Markets Bill
4:45 pm
Lord Kingsland (Conservative)
My rather furtive expression exhibits my fear that when I subside my noble friend might rise again!
Our Amendment No. 231XA is an amendment to Clause 141. Under that clause, the contravention by an authorised person of the authority's rules is actionable at the suit of a private person who suffers loss as a result of the contravention. Members of the Committee are also aware that, in such circumstances, compliance with the FSA's guidance is not a defence to the statutory right to bring an action for damages. Compliance with guidance does not provide a safe harbour against proceedings under Clause 141(1).
Our amendment would add a caveat to the application of Clause 141(1) by adding to Clause 141(4) the words,
"or a non-regulated activity rule".
Non-regulated activity rules are referred to in Clause 130. They are rules made by the FSA applying to authorised persons with respect to the carrying on by them of non-regulated activities. Rules made under Clause 131 are non-regulated activity rules. The proposed amendment would mean that the statutory right to bring an action for damages would be precluded in the case of contraventions of such rules. It is submitted that that is reasonable in principle because the statutory right in Clause 141 should be limited to breaches of the rules which apply to the authorised person's regulated activities.
For those reasons, we object to the Government's Amendment No. 226D. Our amendment draws the distinction between regulated activity and non-regulated activity, as does the Bill as drafted. We do not believe that the right to damages should apply in cases involving breach of non-regulated activities. The effect of the Government's amendment is to do away with that distinction, which we believe should be kept.