Financial Services and Markets Bill
Lord McIntosh of Haringey (Deputy Chief Whip (House of Lords), HM Household; Labour)
My Lords, in moving Amendment No. 83, I shall speak also to Amendment No. 84. I can deal with Amendment No. 83 quickly. It is simply a drafting amendment removing some unnecessary words. Amendment No. 84 is more important.
On the final day of Report stage, I referred to the proposal by the noble and learned Lord, Lord Donaldson, that the Bill should be amended to ensure that the tribunal's jurisdiction could, if necessary, be extended to cover disciplinary proceedings of recognised bodies in the area of market abuse. I said that we intended to table an amendment at Third Reading to deal with this.
That is what the present new clause does. The noble and learned Lord, Lord Donaldson, has kindly taken time to write to me and, to use the words of his letter,
"I concur and have nothing to add".
If a person who is a member of a recognised investment exchange or recognised clearing house engages in behaviour which amounts to market abuse under Clause 114, it is likely that this will also constitute a breach of the rules of the recognised body concerned. Rather than taking market abuse proceedings, the FSA might leave this to be dealt with as an internal disciplinary matter.
In many cases, the recognised bodies might be best placed to take such action, as the bodies closest to the markets. That is right, but when it is the case, the person disciplined would not have the right to refer the matter to an independent tribunal as he would if it had been dealt with by the FSA under Clause 114. The problem with this is that it is conceivable that inconsistency might develop over time between the way such cases are dealt with by recognised bodies as compared with the tribunal. It might; I am not saying that it will but there is a possibility. Subsection (2) allows the Treasury to make an order enabling disciplinary cases to be referred to the tribunal, should that possibility arise.
Subsection (2)(b) deals with a different possibility. We are confident that all the provisions of the Bill are consistent with the provisions of the Human Rights Act 1998 and the European Convention on Human Rights. But it is possible that at some point in the future, developments in the courts' jurisprudence on these matters might require us to provide for an appeal from the internal disciplinary procedures of recognised bodies in market abuse cases to a body such as the tribunal established by the Bill. Subsection (2)(b) would allow the Treasury to make an order allowing for such issues to be referred to the tribunal.
We are taking a power which will enable the Treasury to provide for exchange and clearing house disciplinary cases involving market abuse to be considered by the tribunal in certain circumstances. We do not have any plans to use this power, but if we did we would consult widely, including in particular with the recognised exchanges and clearing houses themselves. I beg to move.