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Financial Services and Markets Act 2000

Section 318: Exercise of powers through the Council

571.This section gives the Authority an alternative mechanism to its power of direction under section 316.  Instead of, or in addition to, giving a direction to the members of Lloyd’s, the Authority can direct the Society or the Council to use their powers - such as the byelaw making powers of the Council under Lloyd’s Act 1982 - to impose obligations on members.  It would, therefore, be open to the Authority to set solvency requirements for Lloyd’s members, perhaps specifying in a direction only the high level requirements required by the EC directives; the Council would then make byelaws specifying the detailed arrangements in accordance with the requirements of the direction.  The Council would be responsible for enforcing its byelaws and for demonstrating to the Authority that the relevant requirements had been met.  When exercising this power, the Authority may additionally impose requirements on the Council or the Society.

572.Subsection (5) also allows the Authority to use this power to direct the Council in respect of managing and members’ agents, rather than exercising powers against them directly as authorised persons.

573.Subsection (6)(a) makes it clear that if the Authority chooses to give directions in this way, it is not precluded from using its other regulatory powers under the Act.

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