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Financial Services (Banking Reform) Act 2013

Financial Services Compensation Scheme

Section 14: Discharge of functions by scheme manager

98.Sections 14 to 16 make provision in relation to the scheme manager of the financial services compensation scheme.

99.Section 14 inserts a new section 224ZA into FSMA to require the scheme manager to have regard to the need for efficiency and effectiveness in the way in which it discharges its functions. It must also have regard to the need to minimise public expenditure in relation to loans or financial assistance to the scheme manager. For example, the scheme manager would be expected to have regard to the need to ensure that the cost to the government of making a loan or providing other financial assistance to the financial services compensation scheme (such as a loan) is covered by repayments made by the scheme to the government.

Section 15: Power to require information

100.Section 15 gives the Treasury power by written notice to require the scheme manager to provide specified information needed by the Treasury in connection with its duties under the Government Resources and Accounts Act 2000 (such as its duty to prepare consolidated accounts for the public sector, and to consolidate information relating to the financial services compensation scheme in its departmental accounts). Subsection (2) requires such information to be provided before the end of a reasonable period specified in the notice.

Section 16: Scheme manager: appointment of accounting officer

101.Section 16 amends section 212 of FSMA. Subsection (2) amends subsection 212(3) of FSMA so that the constitution of the scheme manager must provide for it to have a chief executive, who is to be a member of the board of the scheme manager. The chief executive is also to be the accounting officer. Subsection (3) amends subsection 212(4) of FSMA to provide that the chief executive must be appointed by the PRA and the FCA. The appointment, and if relevant the removal from office, of the chief executive by the regulators will be subject to the approval of the Treasury.

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