This clause, which is even shorter than the previous one, will repeal section 95 of the Financial Services and Markets Act 2000. My powers of deduction tell me that the clause is very much linked to the more mammoth clause 22, which will introduce new arrangements for the regulation of a number of behaviours and practices by the regulators generally. We are deleting provisions in existing legislation at this point of the Bill to have new provisions inserted later; I think that is the case.
Section 95 of the 2000 Act is currently designed to ensure that where a provider or practitioner’s actions have a significantly adverse effect on competition, either by exploiting or unfairly dominating the market, action may be taken by the regulator to check that behaviour. There will be new arrangements in clause 22 to replace those. We could discuss them either now or later, but given that there are a number of other things to be discussed under clause 22, will the Minister explain now the difference between the competition powers that are being abolished by clause 19 and those to be introduced? How will improvements be made by his intended replacement provisions?
I am sure that some inspiration will flow, as most of my speaking notes relating to competition are on clause 22. I am happy to come back in clause 22 to talk about the new competition arrangements, which will make quite an important change to the interrelationship between the OFT and the FCA. There are amendments in a later group on the memorandum of understanding between the FCA and the OFT.
Returning to where we were on Tuesday night, as part 6 was done on a stand-alone basis, just in case the UKLA was moved from the FCA’s remit, it has particular competition powers, which are no different than those elsewhere in FSMA. It was just in case we needed to do a lift and shift to another body. Now that we have determined that the UKLA will be a permanent part of the FCA, it will be subject to the same competition powers that apply to the FCA more broadly. Whereas historically the OFT has played a greater role in competition in financial services, as we have given the FCA the competition objective, the FCA will now play a greater role in pursuing competition in financial services. That is an important change in the new regime compared with the previous one.
However, the OFT still has an important role. It may scrutinise the rules of the regulators to consider what impact those rules will have on competition. There is also an enhanced referral process from the FCA to the competition authorities to deal with certain market structure issues. The Bill gives the FCA much greater powers on competition, but at the same time retains a key role for the OFT in scrutinising the role of the FCA and the Prudential Regulation Authority. There are also new referral rules in place, which will help overall and lead to a greater strengthening of the role of competition in financial services. All members of the Committee would share the objective of wanting to see a more competitive system. The FCA has a key role to play in that. We cannot, however, overlook the importance of the OFT in this.
I appreciate that we will be discussing some of the competition issues in the debate on clause 22 in the not-too-distant future. One example of the strange, convoluted way in which the Bill has been framed is that clause 19 takes out particular provisions, only for those to be replaced later on. I understand that that is broadly a function of the fact that there was a carve-out around listings activities. In extricating the particular legislation around that, the deletion of certain provisions in FSMA arrangements need to be made by this particular clause, and that makes sense. I was seeking assurance from the Minister that the regulator would apply broadly similar competition principles to listing authority activities, as compared with other regulated activities. He gave that reassurance, which will be useful for those involved in those listings activities. I am grateful for that clarification.