Part 1: The Bank of England Section 16: Amendments relating to Part 1
This section introduces Schedule 2.
	Schedule 2 makes consequential amendments to the 1998 Act, FSMA, the 2009 Act and other legislation arising as a result of the amendments to the governance framework of the Bank made by Part 1 of this Act.
	Paragraphs 1 to 22 amend the 1998 Act.
	Paragraph 2 excludes determining the objectives and strategy of the PRA from the functions which the court is responsible for managing under section 2.
	Paragraph 3 removes the requirement for the Bank to work with the PRA in pursuing its Financial Stability Objective. It is no longer necessary to make express provision for this, as the Bank exercises the functions of the PRA itself.
	Paragraph 4 changes the description of the Bank's objectives and strategy for the purposes of the court’s oversight functions to include the PRA's objectives and strategy, so that the court is required to review the Bank's performance in relation to them. It also removes some items from the list of oversight functions, as a consequence of the transfer of the oversight functions from the Oversight Committee to the court (for example, because the items relate to matters which are determined by the court in any event, such as the terms and conditions of certain members of the Bank's statutory committees), or because it would not be appropriate for the court to have oversight of them (for example the remuneration of the Governor and Deputy Governors).
	Paragraphs 5 to 8, 11, 16, 20, and 21 replace references in the 1998 Act to the Oversight Committee with references to the court of directors. Paragraph 5 also removes the requirement for the Governor to consent to the appointment of a Bank officer or employee to conduct a performance review. Paragraph 8 also ensures that those carrying out the court's oversight functions will have access to meetings of the PRC and documents considered by the PRC as well as to the meetings and documents of the other committees of the Bank. However, no member of the court who has an interest in a matter to be considered by the PRC will have access to information or meetings relating to that matter.
	Paragraph 9 requires the court to report on the performance of their oversight functions as part of the annual report of the Bank made under section 4.
	Paragraphs 10, 13, 14, and 22 remove some references to the PRA from the 1998 Act.
	Paragraph 12 amends section 9O to ensure that recommendations by the FPC to the Bank in its capacity as PRA continue to be made under section 9Q (which provides for recommendations by the FPC to the PRA and the FCA) and not under section 9O.
	Paragraph 15 amends the requirement in section 14 for the Bank to publish statements about its decisions whether to take action to meet its monetary policy objectives, and what action the Bank has decided to take, as soon as practicable after the meeting (or, if the MPC decided that the Bank should intervene in the financial markets, after the MPC has decided that the Bank's intervention would not be adversely affected by publication of the decision) so that they need only be published as soon as reasonably practicable. Paragraph 17 makes an equivalent amendment to section 18, so that the Bank needs only publish its quarterly inflation report as soon as reasonably practicable after the period to which it relates.
	Paragraph 18 amends section 40 to provide for the parliamentary procedure applicable to orders made under section 1A(1).
	Paragraph 19 ensures that the court may delegate its functions to any committee of the Bank (including the statutory committees, but not only to those committees). It also amends the title of the chief executive of the PRA to reflect his new title.
	Paragraph 20 amends Schedule 2A to the 1998 Act, which deals with the FPC. Apart from changing references in that Schedule to the oversight committee to references to the court of directors, it also ensures that members of the PRC may not be appointed as members of the FPC as well, requires the Bank to have, and to publish, a code of practice on the way in which conflicts of interest are dealt with by the FPC and gives the Committee power to take decisions outside a meeting by writing.
	Paragraph 21 amends Schedule 3 to the 1998 Act, which deals with the MPC. In addition to changing references in that Schedule to the oversight committee to references to the court of directors, it provides that members of the PRC may not also be appointed as members of the MPC, and amends the ground on which the member of the MPC appointed by the Governor may be removed to reflect the revised qualification for that member (set out in section 7(3) of the Act which substitutes new section 13(3) in the 1998 Act).
	Paragraph 22 ensures that the Bank is able to disclose information to discharge its functions as PRA.
	Paragraph 23 amends the Bank of England Act 1946 to ensure that the Treasury's power to direct the Bank does not apply when the Bank is acting in its capacity as PRA.
	Paragraphs 24 and 25 amend the House of Commons Disqualification Act 1975 and the Northern Ireland Assembly Disqualification Act 1975 so that members of the PRC are not qualified for election either to the House of Commons or to the Northern Ireland Assembly. This disqualification takes the place of the previous disqualification which applied to members of the PRA Board.
	Paragraphs 26 to 51 make consequential amendments to FSMA. In particular, provisions requiring the PRA to consult or to co-operate with the Bank are removed. Once the Bank itself is responsible for exercising the functions of the PRA, the way in which the sections of the Bank which are responsible for its different functions interact with each other will be determined internally by the Bank.
	Paragraphs 27 and 28 remove sections 2O and 2P (these provisions are now made in new sections 7F and 7G of the 1998 Act, inserted by section 11 of the Act).
	Paragraph 29 ensures that the duty to follow principles of good corporate governance only applies in relation to the FCA.
	Paragraph 30 amends requirements in section 3Q for the regulators (the PRA and the FCA) to co-operate with the Bank in relation to its financial stability objective and duties in relation to public funds, so that they only apply to the FCA.
	Paragraph 31 amends section 3R so that the permission for either regulator to enter into arrangements with the Bank for service provision only applies to the FCA.
	Paragraph 32 inserts section 3T into FSMA, defining what is meant by enactment.
	Paragraphs 33 and 34 amend requirements for the regulators to consult with the Bank in relation to rules regarding recovery plans and resolution plans so that the requirements only fall on the FCA.
	Paragraph 35 amends the requirement for the regulators to give the Bank notice when they make, alter or revoke any rule so that it only applies to the FCA.
	Paragraphs 36 and 37 extend the PRA's power to obtain information under sections 165 and 165A of FSMA so that the Bank, acting in its capacity as PRA, is also able to obtain information which the Bank requires for the purposes of its financial stability objective.
	Paragraphs 38, 39 and 40 amend provisions in FSMA dealing with the regulators' consideration of applications for approval of a change of control over a bank, investment firm or banking group company. Paragraph 38 amends section 187A so that the requirement for the FCA to act as soon as reasonably practicable if it wishes to make representations about, object to or seek more information in relation to such an application, is triggered by notification from the PRA that it is itself required to act in a timely manner. Paragraph 39 inserts new subsection (1ZB) into section 189, imposing this requirement to act in a timely manner on the PRA where the Bank is exercising resolution powers in relation to the bank, investment firm or banking group company concerned. Paragraph 40 makes a consequential amendment.
	Paragraphs 41 and 42 amend requirements for both regulators to consult the Bank on the directions they propose (or have decided) to give to qualifying parent undertakings, and in relation to their proposed statement of policy in relation to such directions, so that they only apply to the FCA.
	Paragraph 43 amends the description of the memorandum of understanding (MOU) required by Part 1 of Schedule 17A to FSMA, to reflect that the MOU between the Bank, the PRA and the FCA on their functions in relation to recognised investment exchange and clearing houses will become an MOU between the PRA and the FCA. There will therefore be two MOUs - one between the Bank and the FCA, and one between the FCA and the Bank in its capacity as PRA.
	Paragraph 44 removes the obligation on the PRA to notify the Bank that it has disqualified a person from acting as auditor of a PRA-authorised person.
	Paragraph 45 amends section 348 (restrictions on disclosure of confidential information by FCA, PRA etc.) so that it applies to the Bank, both in its capacity as PRA and otherwise.
	Paragraph 46 amends section 353A (restrictions on disclosing information received from the Bank - including in its capacity as PRA) so that it only applies to information received from the Bank by the FCA.
	Paragraph 47 amends section 354B (PRA's duty to co-operate with others) to remove a reference to the Bank.
	Paragraph 48 repeals section 354C (PRA's duty to provide information to Bank of England), which places an obligation on the PRA to provide information relating to the Bank's financial stability objective to the Bank.
	Paragraph 49 inserts a definition of the Bank into section 417.
	Paragraph 50 amends Schedule 1ZB (the Prudential Regulation Authority). Paragraphs 2 to 16, 18, and 22 to 26 of that Schedule are removed. Paragraph 19, which requires the PRA to make an annual report to the Treasury, is amended to require the report to be made to the Chancellor of the Exchequer instead. Consequential amendments are made to paragraphs 1 and 31.
	Paragraph 51 amends Schedule 17A (provision in relation to the exercise of Part 18 functions by the Bank). The requirement for an MOU between the FCA, the Bank and the PRA on the exercise of their respective functions in relation to PRA-authorised persons who are also recognised bodies becomes a requirement for an MOU between the FCA and the PRA. A requirement for consultation between the Bank and the PRA and FCA in relation to statements of policy on directions to qualifying parent undertakings is limited to consultation between the Bank and the FCA, and requirements on the Bank to consult the PRA in relation to notices of such directions, and on proposed directions to insolvency practitioners, are removed.
	Paragraphs 52 to 63 amend the 2009 Act.
	Paragraph 53 removes a requirement for the Bank to co-operate with the PRA in imposing regulatory sanctions in relation to the Bank's resolution powers.
	Paragraph 54 removes the PRA from the list of persons to whom the Bank may delegate its enforcement functions.
	Paragraph 55 removes a modification of section 348 (restrictions on disclosure of confidential information) which made the Bank a primary recipient under that section. This modification is no longer necessary because of the amendment to section 348 made by paragraph 45.
	Paragraph 56 amends section 96 (grounds for applying) so that the requirements for an application by the Bank for a bank insolvency order are satisfied as soon as the PRA is satisfied of the relevant condition, without the need for formal notification from the PRA to the Bank. Similarly, the requirements for such an application by the PRA are satisfied once the Bank is satisfied of the relevant condition without such notification.
	Paragraph 57 removes the requirements for the Bank and the PRA to consult each other before making an application for the removal of a bank liquidator.
	Paragraph 58 removes the requirement for the consent of the Bank to an application by the PRA for a bank insolvency order.
	Paragraph 59 amends the modifications made by section 129A to sections 96 (grounds for applying for a bank insolvency order), 108 (removal by court) and 117 (bank insolvency as alternate order) in relation to FCA regulated banks. The amendments to the modifications to section 96 ensure that the Bank is not required to consult the PRA where there is a PRA-authorised person in the bank’s immediate group, but that the Bank and the FCA must have informed each other that the conditions for an application for a bank insolvency order for which they are responsible are satisfied before either may make such an order. The amendments to the modifications made to sections 108 and 117 ensure that the FCA is required to consult the Bank before making an application to remove a bank liquidator (section 108), and to obtain the consent of the Bank before applying for a bank insolvency order (section 117).
	Paragraphs 60 and 61 remove provisions permitting the Bank to disclose to the PRA information it has either obtained from a third party under section 204 or that it thinks relevant to financial stability under section 246.
	Paragraph 62 inserts definitions of the PRA and the Bank into the 2009 Act, to distinguish between the two different capacities in which the Bank may act, and paragraph 63 adds these terms to the index of defined provisions in section 261 of that Act.
	Paragraphs 64 to 66 amend the 2012 Act, making a consequential amendment to section 85(8) to refer to the section where the definition of the functions of the PRA is now found (paragraph 65), to amend the definition of the PRA and to add a definition of the Bank (paragraph 66) to distinguish between the two different capacities in which the Bank may act.
	Paragraph 67 amends the 2013 Act by amending the definition of "relevant functions" in relation to the PRA in section 98 of that Act to refer to the section of FSMA where those functions are now defined.
	Paragraph 68 makes some consequential repeals.