1 Repayment of APRT where net profit period not yet reached.

(1)In accordance with the provisions of this Act, advance petroleum revenue tax shall be paid to a participator in an oil field—
(a)in respect of whom none of the chargeable periods ending before 1st July 1986 is his net profit period for the purposes of this Act; and
(b)who was a participator in that field on 6th November 1986 and who, on that date, was entitled to a share of the oil won from that field during the chargeable period ending on 31st December 1986;and the Schedule to this Act shall have effect for determining whether any chargeable period is for the purposes of this Act a participator’s net profit period in relation to a particular oil field.
(2)In this section “relevant participator” means any such participator as is referred to in subsection (1) above; and other expressions used in this Act have the same meaning as in Chapter II of Part VI of the M1Finance Act 1982 (advance petroleum revenue tax).
(3)There shall be determined in the case of every relevant participator the amount by which his APRT credit for the chargeable period ending on 31st December 1986 exceeds his provisional liability for petroleum revenue tax for that period in respect of the field in question and, subject to subsection (5) below, on a claim made in that behalf, there shall be repaid to the participator so much of that excess as does not exceed £15 million.
(4)The reference in subsection (3) above to a participator’s provisional liability for petroleum revenue tax for a chargeable period is a reference to the amount of tax shown to be payable by him for that period in the statement delivered under section 1(1)(a) of the M2Petroleum Revenue Tax Act 1980.
(5)A claim under subsection (3) above shall be made in such form as the Board may prescribe (whether before or after the passing of this Act) and shall be made not later than 28th February 1987 and, for the purposes of this Act, the Board may have regard to claims made before as well as after the passing of this Act.
(6)Paragraph 10(4) of Schedule 19 to the M3Finance Act 1982 (interest on certain repayments of APRT) shall not apply to any amount of APRT which is repayable only by virtue of this Act.
(7)A repayment of APRT made to a relevant participator pursuant to this Act,—
(a)shall be presumed to be a repayment of APRT which was paid later in priority to APRT which was paid earlier; and
(b)shall be disregarded in computing his income for the purposes of income tax or corporation tax.
2 Short title and construction.

(1)This Act may be cited as the Advance Petroleum Revenue Tax Act 1986.
(2)This Act shall be construed as one with Part I of the M1Oil Taxation Act 1975.

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1 Application of food legislation to health authorities and health service premises.

(1)For the purposes of the food legislation—
(a)a health authority shall not be regarded as the servant or agent of the Crown, or as enjoying any status, immunity or privilege of the Crown; and
(b)premises used by a health authority shall not be regarded as property of or property held on behalf of the Crown.
(2)The [F2Ministers] may by regulations—
(a)provide who is to be treated as the occupier or owner of any such premises for any of those purposes; and
(b)make such modifications of the food legislation, in its application to health authorities, as appear to the [F3Ministers] to be necessary for its effective operation in relation to them.
(3)The powers to make regulations conferred by subsection (2) above shall be exercisable by statutory instrument.
(4)A statutory instrument containing regulations made in the exercise of the power conferred by paragraph (a) of that subsection shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(5)A statutory instrument containing regulations made in the exercise of the power conferred by paragraph (b) shall not be made unless a draft of the instrument has been laid before Parliament and approved by a resolution of each House.
(6)Section 125 of the 1977 Act and section 101 of the 1978 Act shall have no effect in relation to any action, liability, claim or demand arising out of the food legislation.
[F4(7)In this section— “the Ministers” has the same meaning as in the Food Safety Act 1990; “the food legislation” means the Food Safety Act 1990 and any regulations or orders made (or having effect as if made) under it; “health authority”—
(a)as respects England and Wales, has the meaning assigned to it by section 128 of the 1977 Act; and
(b)as respects Scotland, means a Health Board constituted under section 2 of the 1978 Act, the Common Services Agency constituted under section 10 of that Act or a State Hospital Management Committee constituted under section 91 of the Mental Health (Scotland) Act 1984.]
(8)This section shall have no effect in relation to anything done or omitted before its commencement.]
2 Health and safety legislation.

(1)For the purposes of health and safety legislation—
(a)a health authority shall not be regarded as the servant or agent of the Crown, or as enjoying any status, immunity or privilege of the Crown; and
(b)premises used by a health authority shall not be regarded as property of or property held on behalf of the Crown.
(2)In this section—
“health authority”—
(a)as respects England and Wales, has the meaning assigned to it by section 128 of the 1977 Act; and
(b)as respects Scotland, means a Health Board constituted under section 2 of the 1978 Act, the Common Services Agency constituted under section 10 of that Act or a State Hospital Management Committee constituted under section 91 of the M1Mental Health (Scotland) Act 1984; and
“the health and safety legislation” means—
(a)the M2Health and Safety at Work etc. Act 1974 and the regulations, orders and other instruments in force under it; and
(b)the enactments specified in the third column of Schedule 1 to that Act and the regulations, orders and other instruments in force under those enactments.
(3)Section 125 of the 1977 Act and section 101 of the 1978 Act shall have no effect in relation to any action, liability, claim or demand arising out of the health and safety legislation.
(4)This section shall have no effect in relation to anything done or omitted before its commencement.]
3 Pharmaceutical services.

F1(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2)Regulations purporting to be made under section 42(b) of the 1977 Act and made before the passing of this Act shall be treated as being and always having been valid.
(3)The following subsections shall be substituted for subsection (2) of section 27 of the 1978 Act—
“(2)Regulations shall provide for securing that arrangements made by a Health Board under subsection (1) will enable persons in the Board’s area for whom drugs, medicines or appliances mentioned in that subsection are ordered as there mentioned to receive them from persons with whom such arrangements have been made.
(3)The regulations shall include provision—
(a)for the preparation and publication by a Health Board of one or more lists of persons, other than medical practitioners and dental practitioners, who undertake to provide pharmaceutical services from premises in the Board’s area;
(b)that an application to a Health Board for inclusion in such a list shall be made in the prescribed manner and shall state—
(i)the services which the applicant will undertake to provide and, if they consist of or include the supply of appliances, which appliances he will undertake to supply; and
(ii)the premises from which he will undertake to provide those services;
(c)that, except in prescribed cases—
(i)an application for inclusion in such a list by a person not already included; and
(ii)an application by a person already included in such a list for inclusion also in respect of services or premises other than those already listed in relation to him,shall be granted only if the Health Board is satisfied, in accordance with the regulations, that it is necessary or desirable to grant it in order to secure in the neighbourhood in which the premises are located the adequate provision by persons included in the list of the services, or some of the services, specified in the application; and
(d)for the removal of an entry in respect of premises from a list if it has been determined in the prescribed manner that the person to whom the entry relates—
(i)has never provided from those premises; or
(ii)has ceased to provide from them,the services, or any of the services, which he is listed as undertaking to provide from them.
(4)The regulations may include provision—
(a)that an application to a Health Board may be granted in respect of some only of the services specified in it;
(b)that an application to a Health Board relating to services of a prescribed description shall be granted only if it appears to the Board that the applicant has satisfied such conditions with regard to the provision of those services as may be prescribed;
(c)that the inclusion of a person in a list in pursuance of such an application may be for a fixed period;
(d)that, where the premises from which an application states that the applicant will undertake to provide services are in an area of a prescribed description, the applicant shall not be included in the list unless his inclusion is approved by a prescribed body and by reference to a prescribed criterion; and
(e)that the prescribed body may give its approval subject to conditions.
(5)The regulations shall include provision conferring on such persons as may be prescribed rights of appeal from decisions made by virtue of subsection (3) or (4).
(6)The regulations shall be so framed as to preclude—
(a)a person included in a list published under subsection (3)(a) above; and
(b)an employee of such a person;from taking part in the decision whether an application such as is mentioned in subsection (3)(c) above should be granted or an appeal against such a decison brought by virtue of subsection (5) above should be allowed.”.
(4)In section 28 of the 1978 Act, after the word “by” where it first occurs in each of subsections (1) and (2) there shall be inserted the words “ or under ”.
4 Remuneration of persons providing general medical services etc.

(1)On a determination of remuneration for any of the descriptions of services mentioned in [F1section 164(1) of the National Health Service Act 2006, or section 76(1) or 88(1) of the National Health Service (Wales) Act 2006] or section 28A(1) of the 1978 Act or any category of services falling within such a description the determining authority may adjust the amount of the remuneration in either or both of the following ways—
(a)by deducting an amount to take account of any overpayment;
(b)by adding an amount to take account of any underpayment,if it appears to the authority that an earlier determination was unsatisfactory.
(2)An earlier determination is to be taken to have been unsatisfactory only if, had it fallen to the authority to make it at the time of the later determination, the authority would have made it on the basis of different information.
(3)If an amount falls to be deducted by virtue of subsection (1)(a) above, the determining authority, in fixing amounts of remuneration for persons to whom the determination relates, may have regard to the period within which they first provided services of the description to which it relates.
(4)In this section—
“earlier determination” means an earlier determination of remuneration of the same or other persons for services of the same description or any category of services falling within that description and includes such a determination made before the passing of this Act;
“overpayment” means the aggregate of any amounts which were properly paid under the earlier determination but which in the authority’s opinion were paid because that determination was unsatisfactory, exclusive of any portion of that aggregate in respect of which a deduction under subsection (1) above has already been made; and
“underpayment” means the aggregate of any amounts which in the authority’s opinion would have been paid under the earlier determination if that determination had not been unsatisfactory, exclusive of any portion of that aggregate in respect of which an addition under subsection (1) above has already been made.
(5)If the later determination is of remuneration for a category of services falling within one of the descriptions of services mentioned in [F2section 164(1) of the National Health Service Act 2006, or section 76(1) or 88(1) of the National Health Service (Wales) Act 2006] or section 28A(1) of the 1978 Act, it is immaterial whether the earlier determination was of remuneration for the same category of services or for any other category of services falling within the same description.
(6)[F3In subsection (7) of section 43B of the 1977 Act and of section 28B of the 1978 Act—
(a)in paragraph (a), for the words “a kind to which the determination will relate” there shall be substituted the words “ the description to which the determination will relate or of any category falling within that description ”; and
(b)the following paragraph shall be substituted for paragraph (d)—
“(d)the extent to which it is desirable to encourage the provision, either generally or in particular places, of the description or category of services to which the determination will relate;”.
(7)The following subsection shall be inserted after each of those subsections—
“(8)If the determination is of remuneration for a category of services falling within one of the descriptions of services mentioned in subsection (1) of the preceding section, the reference in subsection (7)(a) above to a category of services is a reference to the same category of services or to any other category of services falling within the same description.”.]
5 Co-operation and advice in relation to disabled persons, the elderly and others.

(1)After section 13 of the 1978 Act there shall be inserted the following sections—
“13A Co-operation in planning of services for disabled persons, the elderly and others.

(1)The duty under section 13, in relation to persons to whom this section applies, includes—
(a)joint planning of—
(i)services for those persons; and
(ii)the development of those services,being services which are of common concern to Health Boards and either or both of the authorities mentioned in that section;
(b)such consultation with voluntary organisations providing services similar to those mentioned in paragraph (a) as might be expected to contribute substantially to the joint planning of the services mentioned in that paragraph;
(c)the publication, at such times and in such manner as the bodies who have made joint plans under paragraph (a) consider appropriate, of those joint plans.
(2)This section applies to—
(a)disabled persons within the meaning of the Disabled Persons (Services, Consultation and Representation) Act 1986;
(b)persons aged 65 or more; and
(c)such other categories of persons as the Secretary of State may by order specify.
13B Joint Liaison Committees.

(1)The Secretary of State may, after consultation with such Health Boards, local authorities, education authorities, associations of such authorities and other organisations and persons as appear to him to be appropriate, by order provide for the formation and as to the functions of committees, to be known as joint liaison committees, to advise Health Boards and local and education authorities on the performance of such of their duties under section 13 as consist of co-operation in the planning and operation of services of common concern to Health Boards and such authorities.
(2)An order under subsection (1) may contain provisions relating to the role of voluntary organisations in joint liaison committees.”.
(2)Section 15 of the Disabled Persons (Services, Consultation and Representation) Act 1986 is hereby repealed.
6 Expenses.

There shall be paid out of money provided by Parliament any increase attributable to this Act in sums so provided under any other Act.
7 Orders in Council making corresponding provision for Northern Ireland.

An Order in Council under paragraph 1(1)(b) of Schedule 1 to the M1Northern Ireland Act 1974 (legislation for Northern Ireland in the interim period) which states that it is made for purposes corresponding to those of this Act—
(a)shall not be subject to paragraph 1(4) and (5) of that Schedule (affirmative resolution of both Houses of Parliament); but
(b)shall be subject to annulment in pursuance of a resolution of either House.
8 Short title, etc.

(1)This Act may be cited as the National Health Service (Amendment) Act 1986.
(2)In this Act—
F1...F1...F1...M1F1...
“the 1978 Act” means the M2National Health Service (Scotland) Act 1978.
(3)Section 21(1) of the M3Health Services Act 1980 and paragraph 54 of Schedule 1 to that Act shall cease to have effect.
(4)Sections 1 and 2 above shall come into force at the end of the period of three months beginning with the day on which this Act is passed.
(5)Each of the following provisions of this Act—
(a)section 3 above; and
(b)to the extent that it inserts section 13B of the 1978 Act into that Act, section 5 above,shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint in relation to it.
(6)Section 7 above extends to Northern Ireland only, but apart from that section, subsection (1) above and this subsection, this Act does not extend to Northern Ireland.

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1Extension of right to purchase and of " secure tenancy ",
(1)In section 1(3) of the 1980 Act (dwelling-houses to which right to purchase applies), for the words " of paragraphs (a), (b), (c) or (f)" there shall be substituted the words
“paragraph, other than (g),”.
(2)In section 10(2) of the 1980 Act (landlords in secure tenancies)—
(a)after paragraph (a) there shall be inserted the following paragraph—
“(aa)a regional council, or a joint board or joint committee of two or more regional councils, or any trust under the control of a regional council',”; and
(b)after paragraph (g) there shall be inserted the following paragraphs—
“(h)a police authority within the meaning of section 2(1), as read with subsection (9)(b) of section 19, of the Police (Scotland) Act 1967 or a joint police committee constituted by virtue of subsection (2)(b) of the said section 19 ; and
(i)a fire authority in Scotland for the purposes of the Fire Services Acts 1947 to 1959 (or a joint committee constituted by virtue of section 3 6 (4) (b) of the Fire Services Act 1947).”.
2Increased discount where dwelling-house purchased is a flat
— (1) Subject to subsection (3) below, in section 1(5)(b) of the 1980 Act (discount for purposes of calculation of purchase price of dwelling-house)—
(a)in sub-paragraph (i), after the words " 32 per cent," there shall be inserted the words
“, or where the dwelling-house is a flat 44 per cent.,”;
(b)in sub-paragraph (ii), after the words " one per cent." there shall be inserted the words
“, or where the dwelling-house is a flat two per cent.,”;
(c)after the words "60 per cent." there shall be inserted the words
“, or where the dwelling-house is a flat 70 per cent.,”; and
(d)at the end there shall be added the words
“For the purposes of the foregoing provisions of this paragraph a”flat" is a separate and self-contained set of premises, whether or not on the same floor, forming part of a building from some other part of which it is divided horizontally.".
(2)Subject to subsection (3) below, in section 9A of the 1980 Act (application of Part I of that Act when dwelling-house is repurchased as defective), after the words "' 30 per cent.';" there shall be inserted the words
“(AA) for the words ' 44 per cent.' there shall be substituted the words ' 40 per cent.';”.
(3)Subsections (1) and (2) above shall have no effect as regards the exercise of a right to purchase by application under section 2(1) of the 1980 Act if the offer to sell has been duly served (whether by the landlord or, under section 7(3)(a) of that Act, by the Lands Tribunal for Scotland) before the date of coming into force of this section.
3Amendment of date after which certain restrictions may apply as regards price fixed for purchase of dwelling-house; and extension of those restrictions
(1)Subject to subsection (6) below, in subsection (7) of section 1 of the 1980 Act (fixing of price at which tenant entitled to purchase dwelling-house)—
(a)for the words " 15 May 1975 " there shall be substituted the words
“31 December 1978”; and
(b)in paragraph (a), for the words " in providing the dwelling-house " there shall be substituted the words— " after that date (either or both)—
(i)in providing;
(ii)in making improvements (other than by way of repair or maintenance) to, the dwelling-house ".
(2)Subject to subsection (6) below, after the said subsection (7) there shall be inserted the following subsection—
“(7A)Where the dwelling-house was first let under a tenancy which, if Part II of this Act had then been in force, would have been a secure tenancy, on or before the date mentioned in subsection (7) above but an outstanding debt has been incurred after that date in making improvements (other than by way of repair or maintenance) to the dwelling-house, the price fixed under subsection (5) above shall not be less than—
(a)that outstanding debt; or
(b)the market value of the dwelling-house determined under subsection (5)(a) above,whichever is the lesser except in such cases as the Secretary of State may, by order made as is mentioned in subsection (7) above, prescribe.”.
(3)Subject to subsection (6) below, in subsection (8) of the said section 1 (interpretation of " outstanding debt ")—
(a)after the word "means" there shall be inserted the words
“, in relation to paragraph (a)(i) of that subsection,”; and
(b)at the end there shall be added the words " ; and
(e)where the landlord is a body mentioned in paragraph (d) or (e) of section 10(2) of this Act, any proportion of capital grants which it must repay on the dwelling-house being sold ; but in relation to paragraph (a)(ii) of that subsection and in subsection (7A) above its meaning is confined to any undischarged debt arising from the cost of the works of improvement together with—
(i)administrative costs attributable to those works : and
(ii)where the landlord is such body as is mentioned in paragraph (e) above, any such proportion as is there mentioned.".
(4)With the consent of the Treasury the Secretary of State may by order made by statutory instrument—
(a)amend subsection (7) of the said section 1 so as to substitute a later date for—
(i)the words substituted by subsection (1) above;or
(ii)words substituted by virtue of this subsection ;or
(b)provide that subsections (7)(a)(ii), (7A) and (8) of the said section 1 shall apply with such modifications as he may specify in the order;and such order may make different provision in relation to different areas, cases or classes of case and may exclude certain areas, cases or classes of case.
(5)A statutory instrument under subsection (4) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(6)The foregoing provisions of this section shall have no effect as regards the exercise of a right to purchase by application under section 2(1) of the 1980 Act if the offer to sell has been duly served (whether by the landlord or, under section 7(3)(a) of that Act, by the Lands Tribunal for Scotland) before the date of coming into force of this section.
4Secretary of State's power to give directions as to conditions in offers to sell
After section 4 of the 1980 Act there shall be inserted the following section— “Further limitations on conditions of sale.
4A(1)Where it appears to the Secretary of State that the inclusion of conditions of a particular kind in offers to sell would be unreasonable he may by direction require landlords generally, landlords of a particular description, or particular landlords not to include conditions of that kind (or not to include conditions of that kind unless modified in such manner as may be specified in the direction) in offers to sell served on or after a date so specified.
(2)Where a condition's inclusion in an offer to sell—
(a)is in contravention of a direction under subsection (1) above; or
(b)in a case where the tenant has not by the date specified in such a direction served a relative notice of acceptance on the landlord, would have been in such contravention had the offer to sell been served cm or after that date,the condition shall have no effect as regards the offer to sell.
(3)A direction under subsection (1) above may—
(a)make different provision in relation to different areas, cases or classes of case and may exclude certain areas, cases or classes of case; and
(b)be varied or withdrawn by a subsequent direction so given.
(4)Section 211 of the Local Government (Scotland) Act 1973 (provision for default erf local authority) shall apply as regards a failure to comply with a requirement in a direction under subsection (1) above as that section applies as regards such failure as is mentioned in subsection (1) thereof.”.
5Financial and other assistance for tenants involved in proceedings under Part I of 1980 Act etc.
After section 9A of the 1980 Act there shall be inserted the following section— “Financial and other assistance for tenants involved in proceedings under Part I etc.
9B(1)Where, in relation to any proceedings, or prospective proceedings, to which this section applies, a tenant or purchaser is an actual or prospective party, the Secretary of State may on written application to him by the tenant or purchaser give financial or other assistance to the applicant, if the Secretary of State thinks fit to do so:Provided that assistance under this section shall be given only where the Secretary of State considers—
(a)that the case raises a question of principle and that it is in the public interest to give the applicant such assistance; or
(b)that there is some other special consideration.
(2)This section applies to—
(a)any proceedings under this Part of this Act; and
(b)any proceedings to determine any question arising under or in connection with this Part of this Act other than a question as to market value for the purposes of section 1(5) of this Act.
(3)Assistance by the Secretary of State under this section may include—
(a)giving advice;
(b)procuring or attempting to procure the settlement of the matter in dispute ;
(c)arranging for the giving of advice or assistance by a solicitor or counsel;
(d)arranging for representation by a solicitor or counsel;
(e)any other form of assistance which the Secretary of State may consider appropriate.
(4)In so far as, expenses are incurred by the Secretary of State in providing the applicant with assistance under this section, any sums recovered by virtue of an award of expenses, or of an agreement as to expenses, in the applicant's favour with respect to the matter in connection with which the assistance is given shall, subject to any charge or obligation for payment in priority to other debts under the Legal Aid and Advice (Scotland) Acts 1967 and 1972 and to any provision of those Acts for payment of any sum into the legal aid fund, be paid to the Secretary of State in priority to any other debts.
(5)Any expenses incurred by the Secretary of State in providing assistance under this section shall be paid out of money provided by Parliament; and any sums received by the Secretary of State under subsection (4) above shall be paid into the Consolidated Fund.”.
6Information from landlords in relation to Secretary of State's powers under Part I of 1980 Act
After the section inserted into the 1980 Act by section 5 of this Act there shall be inserted the following section— “Information from landlords in relation to Secretary of State's powers under this Part.
9C(1)Without prejudice to section 199 of the Local Government (Scotland) Act 1973 (reports and returns by local authorities etc.), where it appears to the Secretary of State necessary or expedient, in relation to the exercise of his powers under this Part of this Act, he may by notice in writing to a landlord require it—
(a)at such time and at such place as may be specified in the notice, to produce any document; or
(b)within such period as may be so specified or such longer period as the Secretary of State may allow, to furnish a copy of any document or supply any information.
(2)Any officer of the landlord designated in the notice for that purpose or having custody or control of the document or in a position to give that information shall, without instructions from the landlord, take all reasonable steps to ensure that the notice is complied with.”.
7Contributions towards the cost of transfers and exchanges
After section 25 of the 1980 Act there shall be inserted the following cross-heading and section— “Transfers and Exchanges Contributions towards the cost of transfers and exchanges.
25A(1)The Secretary of State may with the consent of the Treasury make out of money provided by Parliament grants or loans towards the cost of arrangements for facilitating moves to and from homes by which—
(a)a secure tenant of one landlord (the " first landlord ") becomes, at his own request, the secure tenant of a different landlord (whether or not by means of an exchange whereby a secure tenant of the different landlord becomes the secure tenant of the first landlord); or
(b)each of two or more tenants of dwelling-houses, one at least of which is let under a secure tenancy, becomes the tenant of the other dwelling house (or, as the case may be, of one of the other dwelling houses).
(2)The grants or loans may be made subject to such conditions as the Secretary of State may determine, and may be made so as to be repayable (or, as the case may be, repayable earlier) if there is a breach of such a condition.
(3)In subsection (1) above, the reference to a " secure tenant" is to a tenant under a secure tenancy within the meaning of this Act or of the Housing Act 1985 or of Chapter II of Part II of the Housing (Northern Ireland) Order 1983.”.
8Duty of housing association to make rules governing housing list etc.
For subsection (1A) of section 27 of the 1980 Act (publication of rules as to housing lists etc.) there shall be substituted the following subsections—
“(1A)It shall be the duty of every registered housing association (within the meaning of the Housing Associations Act 1985)—
(a)within the period of six months commencing with the date of coming into force of section 8 of the Housing (Scotland) Act 1986 to make rules governing the matters mentioned in paragraphs (a) to (d) of subsection (1) above (unless it has, in accordance with subsections (2) and (2A) below, published such rules before that date and those rules remain current);
(b)within six months of the making of rules under paragraph (a) above, and within six months of any alteration of such rules (whether or not made under that paragraph)—
(i)to send a copy of them to each of the bodies mentioned in subsection (1B) below; and
(ii)to publish them in accordance with subsections (2) and (2A) below.
(1B)The bodies referred to in subsection (lA)(b)(i) above are—
(i)the Housing Corporation ; and
(ii)every islands or district council within whose area there is a dwelling house let, or to be let, by the association under a secure tenancy.”.
9Extension of power of islands and district councils to indemnify certain heritable creditors
In section 31 of the 1980 Act (local authority indemnities for building societies)—
(a)in subsection (1)—
(i)after the words "(Northern Ireland) 1967)" and, at the second and third places where they occur, " building society " there shall in each case be inserted the words
“or recognised body”;
(ii)for the words " the standard security " there shall be substituted the words
“a heritable security”;
(b)in subsection (2) for the words "under the standard security" there shall be substituted the words
“. or recognised body, under the heritable security”;
(c)in subsection (5) after the words " building societies " there shall be inserted the words
“or recognised bodies”; and
(d)after subsection (5) there shall be inserted the following subsections— “" (5A) In this section " recognised body " means a body designated, or of a class or description designated, in an order made under this subsection by statutory instrument by the Secretary of State with the consent of the Treasury.
(5B)Before making an order under subsection (5A) above varying or revoking an order previously so made, the Secretary of State shall give an opportunity for representations to be made on behalf of a recognised body which, if the order were made, would cease to be such a body.".
10Removal of restriction on security of tenure
In Schedule 1 to the 1980 Act, paragraph 1 (tenancy not to be secure tenancy if for period exceeding 20 years) shall cease to have effect.
11Restoration of ground for recovery of possession of dwelling-house
In Schedule 2 to the 1980 Act (grounds for recovery of possession of dwelling-houses let under secure tenancies), after paragraph 5 there shall be inserted the following paragraph—
“6The landlord wishes to transfer the secure tenancy of the dwelling-house to—
(a)the tenant's spouse (or former spouse); or
(b)a person with whom the tenant has been living as husband and wife, who has applied to the landlord for such transfer; and either the tenant or the (as the case may be) spouse, former spouse or person, no longer wishes to live together with the other in the dwelling-house.”.
12Further amendment of 1980 Act
The 1980 Act shall have effect subject to the amendments specified in Schedule 1 to this Act.
Amendment of Housing Associations Act 1985

13Shared ownership agreements
(1)In section 4 of the 1985 Act (eligibility of housing associations for registration), at the end of subsection (3) there shall be added the following paragraph—
“(h)in Scotland, acquiring, or repairing and improving, or building, or creating by the conversion of dwellings or other property, dwellings to be disposed of under shared ownership agreements.”.
(2)In section 106(2) of the 1985 Act (interpretation for purposes of application to Scotland), for the definition of " shared ownership lease " there shall be substituted the following definition—'" shared ownership agreement" means an agreement whereby a registered housing association—
(a)sells a pro indiviso right in a dwelling to a person and leases the remaining pro indiviso rights therein to him subject to his being entitled, from time to time, to purchase those remaining rights until he has purchased the entire dwelling; or
(b)conveys pro indiviso tights in dwellings to trustees to hold on behalf of persons each of whom, by purchasing a share in those dwellings, becomes entitled to exclusive occupancy of one of the dwellings but with any such person who wishes to sell or otherwise dispose of his share being required to do so through the agency of the trustees, or such other agreement as may be approved whereby a person acquires from a registered housing association a pro indiviso right in a dwelling or dwellings and thereby becomes entitled to exclusive occupancy of the dwelling or, as the case may be, of one of the dwellings;'.
14Payments etc. in community-based housing associations
After section 15 of the 1985 Act there shall be inserted the following section— “Payments etc. in community-based housing associations in Scotland.
15A(1)In relation to a community-based housing association in Scotland the following are also permitted, notwithstanding section 15(1) of this Act—
(a)payments made by the association in respect of the purchase of a dwelling, or part of a dwelling, owned and occupied by a person described in subsection (2) below who is not an employee of the association; but only if—
(i)such payments constitute expenditure in connection with housing projects undertaken for the purpose of improving or repairing dwellings, being expenditure in respect of which housing association grants may be made under section 41(1) of this Act; and
(ii)the purchase price does not exceed such value as may be placed on the dwelling, or as the case may be part, by the district valuer;
(b)the granting of the tenancy of a dwelling,or part of a dwelling, to such a person; but only if the person—
(i)lives in the dwelling or in another dwelling owned by the association ; or
(ii)has at any time within the period of twelve months immediately preceding the granting of the tenancy lived in the dwelling (or such other dwelling) whether or not it belonged to the housing association when he lived there.
(2)The persons mentioned in subsection (1) above are—
(a)a committee member or voluntary officer of the association; or
(b)a person who at any time in the twelve months preceding the payment (or as the case may be the granting of the tenancy) has been such a member or officer ; or
(c)a close relative of a person described in paragraph (a), or (b), above.
(3)For the purposes of subsection (1) above, a housing association is " community-based " if it is designated as such by the Housing Corporation.
(4)The Housing Corporation—
(a)shall make a designation under subsection
(3)above only if it considers that the activities of the housing association relate wholly or mainly to the improvement of dwellings, or the management of improved dwellings, within a particular community (whether or not identified by reference to a geographical area entirely within any one administrative area); and
(b)may revoke such a designation if it considers, after giving the association an opportunity to make representations to it as regards such revocation, that the association's activities have ceased so to relate.”.
15Extension of sections 44 and 45 of 1985 Act to Scotland
Sections 44 (projects qualifying for housing association grant: repair or improvement after exercise of right to buy etc.) and 45 (projects qualifying for such grant: disposal to tenant of charitable housing association etc.) of the 1985 Act shall apply to Scotland ; and accordingly—
(a)in the said section 44—
(i)in subsection (1), after the word "exercise" there shall be inserted the word
“— (a)”; and after the words " 1985 " there shall be inserted the following paragraph—
(b)in Scotland, his right to purchase under section 1 of the Tenants' Rights, Etc. (Scotland) Act 1980,”;
(ii)in subsection (2), after the word " exercised " there shall be inserted the word
“— (a)”; and after the word " lease " there shall be inserted the following paragraph—
; or
(b)in Scotland, the right to purchase,"; and
(iii)for subsection (3) there shall be substituted the following subsection—
“(3)" Dwelling-house ", in the application of this section to—
(a)England and Wales, has the same meaning as in Part V of the Housing Act 1985; and
(b)Scotland, means a house.”; and (b) in the said section 45—
(i)in subsection (2), after the word "for" there shall be inserted the word
“— (a)”and at the end there shall be added the following words—
(b)subsection (11)(e) or (f) of section 1 of the Tenants' Rights, Etc. (Scotland) Act 1980 (analogous Scottish provision) would have a right to purchase under that section.”;
(ii)in subsection (3), at the end there shall be added the words
“; and a dwelling is also publicly funded for this purpose if it is in Scotland and housing association grant has been paid in respect of a project which included its improvement or repair or, where it and another dwelling are both provided for letting under the project, the improvement or repair of that other dwelling.”;
(iii)in subsection (4), at the beginning there shall be inserted the words
“In England and Wales,”; and
(iv)after subsection (4) there shall be added the following subsection—
“(5)In Scotland, where a registered housing association concludes missives for the acquisition of a house and, without taking title, disposes of its interest to a tenant to whom this section applies, subsection (1) and the following provisions have effect as if the association first acquired the house and then disposed of it to the tenant-section 8 (disposal of land by registered housing associations), section 9 (consent of Housing Corporation to disposals),
section 79(2) (power of Housing Corporation to lend to person acquiring interest from registered housing association), and
section 6 of the Tenants' Rights, Etc. (Scotland) Act 1980 (recovery of discount on early re-sale).”.
16Repayment of housing association grant
(1)In section 52 of the 1985 Act (reduction, suspension or reclamation of housing association grant), at the end of subsection (1) there shall be added the following words— “or
(f)there is paid to the association, in respect of land to which the grant relates, an amount payable in pursuance of section 6 of the Tenants' Rights Etc. (Scotland) Act 1980 (recovery of discount on early re-sale), or
(g)in Scotland, there is paid to the association, in respect of land to which the grant relates, an amount payable as regards the purchase, under a shared ownership agreement, of a pro indiviso share in a dwelling by a person who already has such a share in the dwelling under that agreement.”.
(2)In subsection (3)(b) of the said section 52, for the words " or (e) " there shall be substituted the words
“(e), (f) or (g)”.
Housing Expenditure and Grants

17Precondition as regards use of renewal and repairs fund for certain housing expenditure
In paragraph 22(2) of Schedule 3 to the Local Government (Scotland) Act 1975 (restrictions on use of capital and renewal and repair funds), after the word "restaurant" there shall be inserted the words
“; and if the renewal and repair fund is used so to meet expenditure incurred by the authority in relation to any house, or other property, to which their housing revenue account relates, the amount in question shall, subject to paragraph 1(7) of Schedule 4 to the Housing (Financial Provisions (Scotland) Act 1972, first to be carried to the credit of that account”.
18Grants to Scottish Special Housing Association and development corporations
(1)In section 4 of the Housing (Financial Provisions) (Scotland) Act 1978 (grants to Scottish Special Housing Association and development corporations)—
(a)for subsection (1) there shall be substituted the following subsection—
“(1)The Secretary of State may each year make grants, of such amount and subject to such conditions as he may determine, to the Scottish Special Housing Association (in this Act referred to as " the Association") and to development corporations in accordance with the provisions of this section.
; and (b) in subsection (2), for the words from " calculated " to " State " there shall be substituted the words
approved by the Secretary of State and calculated in accordance with rules made by him. (2) After the said section 4 there shall be inserted the following section—”
4A(1)The Secretary of State may, on the application of the Association, make grants to the Association for affording relief from—
(a)income tax (other than income tax which the Association is entitled to deduct on making any payment); and
(b)corporation tax.
(2)A grant under this section shall be of such amount, shall be made at such times and shall be subject to such conditions as the Secretary of State thinks fit.
(3)The conditions mentioned in subsection (2) above may include conditions for securing the repayment in whole or in part of a grant made to the Association in the event of tax in respect of which the grant was made subsequently being found not to be chargeable or in such other events as the Secretary of State may determine.
(4)An application under this section shall be made in such manner and shall be supported by such evidence as the Secretary of State may direct.
(5)The Commissioners of Inland Revenue and their officers may disclose to the Secretary of State such particulars as he may reasonably require for determining whether a grant should be made under this section or whether a grant so made should be repaid or the amount of such grant or repayment.”.
Amendment of Building (Scotland) Act 1959

19Amendment of Building (Scotland) Act 1959
(1)The Building (Scotland) Act 1959 shall be amended in accordance with the following provisions of this section.
(2)In section 3 (4) (b) (circumstances in which building standards regulations are not to apply), after the words " exempted classes " there shall be inserted the words
“, to such extent as may be specified in the regulations”.
(3)For section 4B (power of Secretary of State to approve types of building, etc.), there shall be substituted the following section-— “Class warrants.
4B(1)The following provisions of this section shall have effect with a view to enabling the Secretary of State, on an application being made to him under this section, to issue a certificate (to be known as a " class warrant") that a particular design (including specification of materials) of building conforms, either generally or in any class of case, to particular provisions of the building standards regulations.
(2)A person intending to apply for a class warrant under this section shall send a copy of the prospective application in the prescribed manner to a body designated by the Secretary of State which, if it is satisfied that the design in respect of which the warrant is sought conforms to the building standards regulations, shall recommend that the class warrant be issued.
(3)An application to the Secretary of State for a class warrant under this section shall be made in the prescribed manner and shall be accompanied by a relevant recommendation made under subsection (2) above.
(4)The Secretary of State may, where a recommendation under subsection (2) above is made in respect of a design of building, issue a class warrant in respect of that design ; and a class warant so issued shall be accepted by a local authority as conclusive of the matters stated therein.
(5)A body designated under subsection (2) above may charge such fee for considering a design in respect of which a copy application has been sent to it under that subsection as may be agreed between the applicant and the body.
(6)A class warrant shall, if it so provides, cease to have effect at the end of such period as may be specified in it.
(7)The Secretary of State may at any time vary or revoke a class warrant; but before doing so he shall give the person on whose application it was issued reasonable notice that he proposes so to do.
(8)Where the Secretary of State varies or revokes a class warrant he shall publish notice of that fact in such manner as he thinks fit.
(9)There may be prescribed—
(a)the type, part or parts of building to which the provisions of this section shall apply ;
(b)the terms and conditions on which a class warrant may be issued ;
(c)procedures incidental to any provisions of this section;
(d)the fee, if any, to be charged for issuing a class warrant;
(e)any variations in the design of building which will be permitted.
(10)Where a fee is chargeable by virtue of subsection (9)(d) above, the regulations under which it is chargeable may make different provision (which, without prejudice to the generality of this subsection, may include provision for remission of the fee in whole or in part) for—
(a)different cases or classes of case ; or
(b)different circumstances or classes of circumstances,(difference being determined by reference to any factor or factors whatsoever).”.
(4)After section 6 there shall be inserted the following section— “Self-certification of design.
6AA(1)On making an application for a warrant under section 6 of this Act, an applicant may submit a certificate issued under this section certifying that the design (including the specification of material to be used) of the building complies with building standards regulations prescribed under paragraph (a) of subsection (2) below ; and in determining whether to issue the warrant, the local authority shall accept the certificate as conclusive of the facts to which it relates.
(2)There may be prescribed—
(a)the part or parts of the building standards regulations in relation to which a certificate under this section may be submitted and different provision may be made in respect of different parts of the regulations and in respect of different types of building ;
(b)whether or not by reference to specific criteria, such person or persons as shall be entitled to issue such certificate ;
(c)the form of such certificate ;
(d)the drawings, plans, specifications or other material which shall be submitted with the certificate.”.
(5)In section 9 (certificate of completion), after subsection (2) there shall be inserted the following subsection—
“(2A)Where the Secretary of State has issued a relevant class warrant, a local authority shall grant a certificate of completion in respect of any building unless—
(i)the approved design (or an approved variation) has not been complied with whether by reason of faulty workmanship or otherwise; or
(ii)the building standards regulations in relation to any part of the building to which section 4B of this Act does not apply have not been complied with.”.
(6)For section 20 (fees chargeable by local authorities) there shall be substituted the following section— “Fees chargeable by local authorities.
20(1)A local authority may in respect of the performance of their functions under this Act charge such fees as may be prescribed; but there may also be prescribed cases or classes of case for which, or circumstances or classes of circumstances where, no fee shall be chargeable.
(2)Where a fee is chargeable by virtue of subsection (1) above, the regulations under which it is so chargeable may make different provision (which, without prejudice to the generality of this subsection, may include provision for remission of the fee in whole or in part) for—
(a)different cases or classes of case ;
(b)different circumstances or classes of circumstances ;
(c)different items or classes of business, (difference being determined by reference to any factor or factors whatsoever).”.
Amendment of Land Compensation (Scotland) Act 1973

20Compensation for person displaced from dwelling-house let under secure tenancy
— (1) The Land Compensation (Scotland) Act 1973 shall be amended in accordance with the following provisions of this section.
(2)In section 27(1) (right to home loss payment where person displaced from dwelling)—
(a)after paragraph (e) there shall be inserted the following paragraph—
“(f)an order for recovery of possession of the dwelling under section 15(2) of the Tenants' Rights, Etc. (Scotland) Act 1980, on the ground set out in paragraph 10 of Part I of Schedule 2 to that Act,”; and
(b)after sub-paragraph (v) there shall be inserted the following sub-paragraph—
“(vi)where paragraph (f) above applies, the landlord.”.
(3)In section 29 (supplementary provisions about home loss payments), after subsection (7) there shall be inserted the following subsection—
“(7AA)If a landlord recovers possession of a dwelling by agreement—
(a)after serving notice under section 14 of the Tenants' Rights, Etc. (Scotland) Act 1980 on the tenant specifying the ground set out in paragraph 10 of Part I of Schedule 2 to that Act; or
(b)where, but for that agreement, it would have served such notice on him specifying that ground, it may, in connection with the recovery, make to him a payment corresponding to any home loss payment which it would be required to make to him if the recovery were by order under section 15(2) of that Act.”.
Amendment of Housing (Homeless Persons) Act 1977

21Functions of local authorities with respect to persons who are homeless or threatened with homelessness
(1)The Housing (Homeless Persons) Act 1977 shall be amended in accordance with the following provisions of this section.
(2)In section 1(2) (homeless persons and persons threatened with homelessness) after paragraph (c) there shall be inserted the following paragraph—
“(d)it is overcrowded as denned in section 89 of the Housing (Scotland) Act 1966 and may endanger the health of the occupants.”
(3)In section 4 (duties of housing authorities to homeless persons and persons threatened with homelessness) after subsection (6) there shall be inserted the following subsection_
“(7)Where a local authority has a duty under subsections (4) and (5) above "accommodation" shall be denned as accommodation that shall not be overcrowded as denned in section 89 of the Housing (Scotland) Act 1966 and which does not pose a threat to the health of the occupants.”.
Supplemental

22Interpretation
In this Act—
" the 1980 Act " means the Tenants' Rights, Etc. (Scotland) Act 1980; and
"the 1985 Act" means the Housing Associations Act 1985.
23Consequential, transitional and supplementary provision
(1)The Secretary of State may by order made by statutory instrument make such incidental, consequential, transitional or supplementary provision as appears to him to be necessary or proper for giving full effect to, or in consequence of any of the provisions of, this Act.
(2)A statutory instrument made under subsection (1) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(3)Paragraph 7(a)(ii) and (6)(ii) of Schedule 1 to this Act shall have no effect as regards any case in which repayment has become exigible under subsection (1) of section 6 of the 1980 Act before the coming into force of that paragraph ; but in any other case the terms of any standard security, offer to sell or concluded missives shall, in so far as they are inconsistent with the period of years specified in that subsection, or with the proportions specified in subsection (3) of that section, have effect as if so modified as to obviate that inconsistency.
24Expenses
There shall be paid out of the money provided by Parliament any—
(a)sums required by the Secretary of State for making grants, loans or other payments by virtue of this Act;
(b)administrative expenses incurred by him by virtue of this Act;
(c)increase attributable to the provisions of this Act in the sums which under any other enactment are paid out of money so provided.
25Minor amendments and repeals
(1)The enactments specified in Schedule 2 to this Act shall have effect subject to the amendments there specified, (being minor amendments or amendments consequential on the provisions of this Act).
(2)The enactments specified in Schedule 3 to this Act are repealed to the extent specified in the third column of that Schedule.
26Citation, commencement and extent
— (1) This Act may be cited as the Housing (Scotland) Act 1986.
(2)This Act, except this section, shall come into force on such day as the Secretary of State may appoint by order made by statutory instrument; and different days may be so appointed for different provisions and for different purposes.
(3)This Act applies to Scotland only.

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1Riot
(1)Where 12 or more persons who are present together use or threaten unlawful violence for a common purpose and the conduct of them (taken together) is such as would cause a person of reasonable firmness present at the scene to fear for his personal safety, each of the persons using unlawful violence for the common purpose is guilty of riot.
(2)It is immaterial whether or not the 12 or more use or threaten unlawful violence simultaneously.
(3)The common purpose may be inferred from conduct.
(4)No person of reasonable firmness need actually be, or be likely to be, present at the scene.
(5)Riot may be committed in private as well as in public places.
(6)A person guilty of riot is liable on conviction on indictment to imprisonment for a term not exceeding ten years or a fine or both.
2Violent disorder
(1)Where 3 or more persons who are present together use or threaten unlawful violence and the conduct of them (taken together) is such as would cause a person of reasonable firmness present at the scene to fear for his personal safety, each of the persons using or threatening unlawful violence is guilty of violent disorder.
(2)It is immaterial whether or not the 3 or more use or threaten unlawful violence simultaneously.
(3)No person of reasonable firmness need actually be, or be likely to be, present at the scene.
(4)Violent disorder may be committed in private as well as in public places.
(5)A person guilty of violent disorder is liable on conviction on indictment to imprisonment for a term not exceeding 5 years or a fine or both, or on summary conviction to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum or both.
3Affray
(1)A person is guilty of affray if he uses or threatens unlawful violence towards another and his conduct is such as would cause a person of reasonable firmness present at the scene to fear for his personal safety.
(2)Where 2 or more persons use or threaten the unlawful violence, it is the conduct of them taken together that must be considered for the purposes of subsection (1).
(3)For the purposes of this section a threat cannot be made by the use of words alone.
(4)No person of reasonable firmness need actually be, or be likely to be, present at the scene.
(5)Affray may be committed in private as well as in public places.
(6)A constable may arrest without warrant anyone he reasonably suspects is committing affray.
(7)A person guilty of affray is liable on conviction on indictment to imprisonment for a term not exceeding 3 years or a fine or both, or on summary conviction to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum or both.
4Fear or provocation of violence
(1)A person is guilty of an offence if he—
(a)uses towards another person threatening, abusive or insulting words or behaviour, or
(b)distributes or displays to another person any writing, sign or other visible representation which is threatening, abusive or insulting,with intent to cause that person to believe that immediate unlawful violence will be used against him or another by any person, or to provoke the immediate use of unlawful violence by that person or another, or whereby that person is likely to believe that such violence will be used or it is likely that such violence will be provoked.
(2)An offence under this section may be committed in a public or a private place, except that no offence is committed where the words or behaviour are used, or the writing, sign or other visible representation is distributed or displayed, by a person inside a dwelling and the other person is also inside that or another dwelling.
(3)A constable may arrest without warrant anyone he reasonably suspects is committing an offence under this section.
(4)A person guilty of an offence under this section is liable on summary conviction to imprisonment for a term not exceeding 6 months or a fine not exceeding level 5 on the standard scale or both.
5Harassment, alarm or distress
(1)A person is guilty of an offence if he—
(a)uses threatening, abusive or insulting words or behaviour, or disorderly behaviour, or
(b)displays any writing, sign or other visible representation which is threatening, abusive or insulting, within the hearing or sight of a person likely to be caused harassment, alarm or distress thereby.
(2)An offence under this section may be committed in a public or a private place, except that no offence is committed where the words or behaviour are used, or the writing, sign or other visible representation is displayed, by a person inside a dwelling and the other person is also inside that or another dwelling.
(3)It is a defence for the accused to prove—
(a)that he had no reason to believe that there was any person within hearing or sight who was likely to be caused harassment, alarm or distress, or
(b)that he was inside a dwelling and had no reason to believe that the words or behaviour used, or the writing, sign or other visible representation displayed, would be heard or seen by a person outside that or any other dwelling, or
(c)that his conduct was reasonable.
(4)A constable may arrest a person without warrant if—
(a)he engages in offensive conduct which the constable warns him to stop, and
(b)he engages in further offensive conduct immediately or shortly after the warning.
(5)In subsection (4) " offensive conduct" means conduct the constable reasonably suspects to constitute an offence under this section, and the conduct mentioned in paragraph (a) and the further conduct need not be of the same nature.
(6)A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
6Mental element: miscellaneous
(1)A person is guilty of riot only if he intends to use violence or is aware that his conduct may be violent.
(2)A person is guilty of violent disorder or affray only if he intends to use or threaten violence or is aware that his conduct may be violent or threaten violence.
(3)A person is guilty of an offence under section 4 only if he intends his words or behaviour, or the writing, sign or other visible representation, to be threatening, abusive or insulting, or is aware that it may be threatening, abusive or insulting.
(4)A person is guilty of an offence under section 5 only if he intends his words or behaviour, or the writing, sign or other visible representation, to be threatening, abusive or insulting, or is aware that it may be threatening, abusive or insulting or (as the case may be) he intends his behaviour to be or is aware that it may be disorderly.
(5)For the purposes of this section a person whose awareness is impaired by intoxication shall be taken to be aware of that of which he would be aware if not intoxicated, unless he shows either that his intoxication was not self-induced or that it was caused solely by the taking or administration of a substance in the course of medical treatment.
(6)In subsection (5) " intoxication " means any intoxication, whether caused by drink, drugs or other means, or by a combination of means.
(7)Subsections (1) and (2) do not affect the determination for the purposes of riot or violent disorder of the number of persons who use or threaten violence.
7Procedure: miscellaneous
—(l) No prosecution for an offence of riot or incitement to riot may be instituted except by or with the consent of the Director of Public Prosecutions.
(2)For the purposes of the rules against charging more than one offence in the same count or information, each of sections 1 to 5 creates one offence.
(3)If on the trial on indictment of a person charged with violent disorder or affray the jury find him not guilty of the offence charged, they may (without prejudice to section 6(3) of the Criminal Law Act 1967) find him guilty of an offence under section 4.
(4)The Crown Court has the same powers and duties in relation to a person who is by virtue of subsection (3) convicted before it of an offence under section 4 as a magistrates' court would have on convicting him of the offence.
8Interpretation
In this Part—
" dwelling " means any structure or part of a structure occupied as a person's home or as other living accommodation (whether the occupation is separate or shared with others) but does not include any part not so occupied, and for this purpose " structure " includes a tent, caravan, vehicle, vessel or other temporary or movable structure;
" violence " means any violent conduct, so that—
(a)except in the context of affray, it includes violent conduct towards property as well as violent conduct towards persons, and
(b)it is not restricted to conduct causing or intended to cause injury or damage but includes any other violent conduct (for example, throwing at or towards a person a missile of a kind capable of causing injury which does not hit or falls short).
9Offences abolished
(1)The common law offences of riot, rout, unlawful assembly and affray are abolished.
(2)The offences under the following enactments are abolished—
(a)section 1 of the Tumultuous Petitioning Act 1661 (presentation of petition to monarch or Parliament accompanied by excessive number of persons),
(b)section 1 of the Shipping Offences Act 1793 (interference with operation of vessel by persons riotously assembled),
(c)section 23 of the Seditious Meetings Act 1817 (prohibition of certain meetings within one mile of Westminster Hall when Parliament sitting), and
(d)section 5 of the Public Order Act 1936 (conduct conducive to breach of the peace).
10Construction of other instruments
(1)In the Riot (Damages) Act 1886 and in section 515 of the Merchant Shipping Act 1894 (compensation for riot damage) " riotous " and " riotously " shall be construed in accordance with section 1 above.
(2)In Schedule 1 to the Marine Insurance Act 1906 (form and rules for the construction of certain insurance policies) " rioters " in rule 8 and " riot" in rule 10 shall, in the application of the rules to any policy taking effect on or after the coming into force of this section, be construed in accordance with section 1 above unless a different intention appears.
(3)" Riot " and cognate expressions in any enactment in force before the coming into force of this section (other than the enactments mentioned in subsections (1) and (2) above) shall be construed in accordance with section 1 above if they would have been construed in accordance with the common law offence of riot apart from this Part.
(4)Subject to subsections (1) to (3) above and unless a different intention appears, nothing in this Part affects the meaning of " riot" or any cognate expression in any enactment in force, or other instrument taking effect, before the coming into force of this section.
Part II
Processions and Assemblies

11Advance notice of public processions
(1)Written notice shall be given in accordance with this section of any proposal to hold a public procession intended
(a)to demonstrate support for or opposition to the views or actions of any person or body of persons,
(b)to publicise a cause or campaign, or
(c)to mark or commemorate an event, unless it is not reasonably practicable to give any advance notice of the procession.
(2)Subsection (1) does not apply where the procession is one commonly or customarily held in the police area (or areas) in which it is proposed to be held or is a funeral procession organised by a funeral director acting in the normal course of his business.
(3)The notice must specify the date when it is intended to hold the procession, the time when it is intended to start it, its proposed route, and the name and address of the person (or of one of the persons) proposing to organise it.
(4)Notice must be delivered to a police station—
(a)in the police area in which it is proposed the procession will start, or
(b)where it is proposed the procession will start in Scotland and cross into England, in the first police area in England on the proposed route.
(5)If delivered not less than 6 clear days before the date when the procession is intended to be held, the notice may be delivered by post by the recorded delivery service; but section 7 of the Interpretation Act 1978 (under which a document sent by post is deemed to have been served when posted and to have been delivered in the ordinary course of post) does not apply.
(6)If not delivered in accordance with subsection (5), the notice must be delivered by hand not less than 6 clear days before the date when the procession is intended to be held or, if that is not reasonably practicable, as soon as delivery is reasonably practicable.
(7)Where a public procession is held, each of the persons organising it is guilty of an offence if—
(a)the requirements of this section as to notice have not been satisfied, or
(b)the date when it is held, the time when it starts, or its route, differs from the date, time or route specified in the notice.
(8)It is a defence for the accused to prove that he did not know of, and neither suspected nor had reason to suspect, the failure to satisfy the requirements or (as the case may be) the difference of date, time or route.
(9)To the extent that an alleged offence turns on a difference of date, time or route, it is a defence for the accused to prove that the difference arose from circumstances beyond his control or from something done with the agreement of a police officer or by his direction.
(10)A person guilty of an offence under subsection (7) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
12Imposing conditions on public processions
(1)If the senior police officer, having regard to the time or place at which and the circumstances in which any public procession is being held or is intended to be held and to its route or proposed route, reasonably believes that—
(a)it may result in serious public disorder, serious damage to property or serious disruption to the life of the community, or
(b)the purpose of the persons organising it is the intimidation of others with a view to compelling them not to do an act they have a right to do, or to do an act they have a right not to do, he may give directions imposing on the persons organising or taking part in the procession such conditions as appear to him necessary to prevent such disorder, damage, disruption or intimidation, including conditions as to the route of the procession or prohibiting it from entering any public place specified in the directions.
(2)In subsection (1) " the senior police officer " means—
(a)in relation to a procession being held, or to a procession intended to be held in a case where persons are assembling with a view to taking part in it, the most senior in rank of the police officers present at the scene, and
(b)in relation to a procession intended to be held in a case where paragraph (a) does not apply, the chief officer of police.
(3)A direction given by a chief officer of police by virtue of subsection (2)(b) shall be given in writing.
(4)A person who organises a public procession and knowingly fails to comply with a condition imposed under this section is guilty of an offence, but it is a defence for him to prove that the failure arose from circumstances beyond his control.
(5)A person who takes part in a public procession and knowingly fails to comply with a condition imposed under this section is guilty of an offence, but it is a defence for him to prove that the failure arose from circumstances beyond his control.
(6)A person who incites another to commit an offence under subsection (5) is guilty of an offence.
(7)A constable in uniform may arrest without warrant anyone he reasonably suspects is committing an offence under subsection (4), (5) or (6).
(8)A person guilty of an offence under subsection (4) is liable on summary conviction to imprisonment for a term not exceeding 3 months or a fine not exceeding level 4 on the standard scale or both.
(9)A person guilty of an offence under subsection (5) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
(10)A person guilty of an offence under subsection (6) is liable on summary conviction to imprisonment for a term not exceeding 3 months or a fine not exceeding level 4 on the standard scale or both, notwithstanding section 45(3) of the Magistrates' Courts Act 1980 (inciter liable to same penalty as incited).
(11)In Scotland this section applies only in relation to a procession being held, and to a procession intended to be held in a case where persons are assembling with a view to taking part in it.
13Prohibiting public processions
(1)If at any time the chief officer of police reasonably believes that, because of particular circumstances existing in any district or part of a district, the powers under section 12 will not be sufficient to prevent the holding of public processions in that district or part from resulting in serious public disorder, he shall apply to the council of the district for an order prohibiting for such period not exceeding 3 months as may be specified in the application the holding of all public processions (or of any class of public procession so specified) in the district or part concerned.
(2)On receiving such an application, a council may with the consent of the Secretary of State make an order either in the terms of the application or with such modifications as may be approved by the Secretary of State.
(3)Subsection (1) does not apply in the City of London or the metropolitan police district.
(4)If at any time the Commissioner of Police for the City of London or the Commissioner of Police of the Metropolis reasonably believes that, because of particular circumstances existing in his police area or part of it, the powers under section 12 will not be sufficient to prevent the holding of public processions in that area or part from resulting in serious public disorder, he may with the consent of the Secretary of State make an order prohibiting for such period not exceeding 3 months as may be specified in the order the holding of all public processions (or of any class of public procession so specified) in the area or part concerned.
(5)An order made under this section may be revoked or varied by a subsequent order made in the same way, that is, in accordance with subsections (1) and (2) or subsection (4), as the case may be.
(6)Any order under this section shall, if not made in writing, be recorded in writing as soon as practicable after being made.
(7)A person who organises a public procession the holding of which he knows is prohibited by virtue of an order under this section is guilty of an offence.
(8)A person who takes part in a public procession the holding of which he knows is prohibited by virtue of an order under this section is guilty of an offence.
(9)A person who incites another to commit an offence under subsection (8) is guilty of an offence.
(10)A constable in uniform may arrest without warrant anyone he reasonably suspects is committing an offence under subsection (7), (8) or (9).
(11)A person guilty of an offence under subsection (7) is liable on summary conviction to imprisonment for a term not exceeding 3 months or a fine not exceeding level 4 on the standard scale or both.
(12)A person guilty of an offence under subsection (8) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
(13)A person guilty of an offence under subsection (9) is liable on summary conviction to imprisonment for a term not exceeding 3 months or a fine not exceeding level 4 on the standard scale or both, notwithstanding section 45(3) of the Magistrates' Courts Act 1980.
14Imposing conditions on public assemblies
(1)If the senior police officer, having regard to the time or place at which and the circumstances in which any public assembly is being held or is intended to be held, reasonably believes that—
(a)it may result in serious public disorder, serious damage to property or serious disruption to the life of the community, or
(b)the purpose of the persons organising it is the intimidation of others with a view to compelling them not to do an act they have a right to do, or to do an act they have a right not to do, he may give directions imposing on the persons organising or taking part in the assembly such conditions as to the place at which the assembly may be (or continue to be) held, its maximum duration, or the maximum number of persons who may constitute it, as appear to him necessary to prevent such disorder, damage, disruption or intimidation.
(2)In subsection (1) " the senior police officer " means—
(a)in relation to an assembly being held, the most senior in rank of the police officers present at the scene, and
(b)in relation to an assembly intended to be held, the chief officer of police.
(3)A direction given by a chief officer of police by virtue of subsection (2)(b) shall be given in writing.
(4)A person who organises a public assembly and knowingly fails to comply with a condition imposed under this section is guilty of an offence, but it is a defence for him to prove that the failure arose from circumstances beyond his control.
(5)A person who takes part in a public assembly and knowingly fails to comply with a condition imposed under this section is guilty of an offence, but it is a defence for him to prove that the failure arose from circumstances beyond his control.
(6)A person who incites another to commit an offence under subsection (5) is guilty of an offence.
(7)A constable in uniform may arrest without warrant anyone he reasonably suspects is committing an offence under subsection (4), (5) or (6).
(8)A person guilty of an offence under subsection (4) is liable on summary conviction to imprisonment for a term not exceeding 3 months or a fine not exceeding level 4 on the standard scale or both.
(9)A person guilty of an offence under subsection (5) is liable on summary conviction to a fine not exceeding level 3 on the standard scale.
(10)A person guilty of an offence under subsection (6) is liable on summary conviction to imprisonment for a term not exceeding 3 months or a fine not exceeding level 4 on the standard scale or both, notwithstanding section 45(3) of the Magistrates' Courts Act 1980.
15Delegation
— (1) The chief officer of police may delegate, to such extent and subject to such conditions as he may specify, any of his functions under sections 12 to 14 to a deputy or assistant chief constable; and references in those sections to the person delegating shall be construed accordingly.
(2)Subsection (1) shall have effect in the City of London and the metropolitan police district as if " a deputy or assistant chief constable " read " an assistant commissioner of police ".
16Interpretation
In this Part—
" the City of London " means the City as defined for the purposes of the Acts relating to the City of London police;
" the metropolitan police district" means that district as defined in section 76 of the London Government Act 1963;
" public assembly" means an assembly of 20 or more persons in a public place which is wholly or partly open to the air;
" public place " means—
(a)any highway, or in Scotland any road within the meaning of the Roads (Scotland) Act 1984, and
(b)any place to which at the material time the public or any section of the public has access, on payment or otherwise, as of right or by virtue of express or implied permission ;
" public procession " means a procession in a public place.
Part III
Racial Hatred

Meaning of " racial hatred "

17Meaning of " racial hatred "
In this Part " racial hatred " means hatred against a group of persons in Great Britain defined by reference to colour, race, nationality (including citizenship) or ethnic or national origins.
Acts intended or likely to stir up racial hatred

18Use of words or behaviour or display of written material
(1)A person who uses threatening, abusive or insulting words or behaviour, or displays any written material which is threatening, abusive or insulting, is guilty of an offence if—
(a)he intends thereby to stir up racial hatred, or
(b)having regard to all the circumstances racial hatred is likely to be stirred up thereby.
(2)An offence under this section may be committed in a public or a private place, except that no offence is committed where the words or behaviour are used, or the written material is displayed, by a person inside a dwelling and are not heard or seen except by other persons in that or another dwelling.
(3)A constable may arrest without warrant anyone he reasonably suspects is committing an offence under this section.
(4)In proceedings for an offence under this section it is a defence for the accused to prove that he was inside a dwelling and had no reason to believe that the words or behaviour used, or the written material displayed, would be heard or seen by a person outside that or any other dwelling.
(5)A person who is not shown to have intended to stir up racial hatred is not guilty of an offence under this section if he did not intend his words or behaviour, or the written material, to be, and was not aware that it might be, threatening, abusive or insulting.
(6)This section does not apply to words or behaviour used, or written material displayed, solely for the purpose of being included in a programme broadcast or included in a cable programme service.
19Publishing or distributing written material
(1)A person who publishes or distributes written material which is threatening, abusive or insulting is guilty of an offence if—
(a)he intends thereby to stir up racial hatred, or
(b)having regard to all the circumstances racial hatred is likely to be stirred up thereby.
(2)In proceedings for an offence under this section it is a defence for an accused who is not shown to have intended to stir up racial hatred to prove that he was not aware of the content of the material and did not suspect, and had no reason to suspect, that it was threatening, abusive or insulting.
(3)References in this Part to the publication or distribution of written material are to its publication or distribution to the public or a section of the public.
20Public performance of play
(1)If a public performance of a play is given which involves the use of threatening, abusive or insulting words or behaviour, any person who presents or directs the performance is guilty of an offence if—
(a)he intends thereby to stir up racial hatred, or
(b)having regard to all the circumstances (and, in particular, taking the performance as a whole) racial hatred is likely to be stirred up thereby.
(2)If a person presenting or directing the performance is not shown to have intended to stir up racial hatred, it is a defence for him to prove—
(a)that he did not know and had no reason to suspect that the performance would involve the use of the offending words or behaviour, or
(b)that he did not know and had no reason to suspect that the offending words or behaviour were threatening, abusive or insulting, or
(c)that he did not know and had no reason to suspect that the circumstances in which the performance would be given would be such that racial hatred would be likely to be stirred up.
(3)This section does not apply to a performance given solely or primarily for one or more of the following purposes—
(a)rehearsal,
(b)making a recording of the performance, or
(c)enabling the performance to be broadcast or included in a cable programme service ; but if it is proved that the performance was attended by persons other than those directly connected with the giving of the performance or the doing in relation to it of the things mentioned in paragraph (b) or (c), the performance shall, unless the contrary is shown, be taken not to nave been given solely or primarily for the purposes mentioned above.
(4)For the purposes of this section—
(a)a person shall not be treated as presenting a performance of a play by reason only of his taking part in it as a performer,
(b)a person taking part as a performer in a performance directed by another shall be treated as a person who directed the performance if without reasonable excuse he performs otherwise than in accordance with that person's direction, and
(c)a person shall be taken to have directed a performance of a play given under his direction notwithstanding that he was not present during the performance; and a person shall not be treated as aiding or abetting the commission of an offence under this section by reason only of his taking part in a performance as a performer.
(5)In this section " play " and " public performance " have the same meaning as in the Theatres Act 1968.
(6)The following provisions of the Theatres Act 1968 apply in relation to an offence under this section as they apply to an offence under section 2 of that Act—section 9 (script as evidence of what was performed),
section 10 (power to make copies of script),
section 15 (powers of entry and inspection).
21Distributing, showing or playing a recording
(1)A person who distributes, or shows or plays, a recording of visual images or sounds which are threatening, abusive or insulting is guilty of an offence if—
(a)he intends thereby to stir up racial hatred, or
(b)having regard to all the circumstances racial hatred is likely to be stirred up thereby.
(2)In this Part " recording " means any record from which visual images or sounds may, by any means, be reproduced; and references to the distribution, showing or playing of a recording are to its distribution, showing or playing to the public or a section of the public.
(3)In proceedings for an offence under this section it is a defence for an accused who is not shown to have intended to stir up racial hatred to prove that he was not aware of the content of the recording and did not suspect, and had no reason to suspect, that it was threatening, abusive or insulting.
(4)This section does not apply to the showing or playing of a recording solely for the purpose of enabling the recording to be broadcast or included in a cable programme service.
22Broadcasting or including programme in cable programme service
(1)If a programme involving threatening, abusive or insulting visual images or sounds is broadcast, or included in a cable programme service, each of the persons mentioned in subsection (2) is guilty of an offence if—
(a)he intends thereby to stir up racial hatred, or
(b)having regard to all the circumstances racial hatred is likely to be stirred up thereby.
(2)The persons are—
(a)the person providing the broadcasting or cable programme service,
(b)any person by whom the programme is produced or directed, and
(c)any person by whom offending words or behaviour are used.
(3)If the person providing the service, or a person by whom the programme was produced or directed, is not shown to have intended to stir up racial hatred, it is a defence for him to prove that—
(a)he did not know and had no reason to suspect that the programme would involve the offending material, and
(b)having regard to the circumstances in which the programme was broadcast, or included in a cable programme service, it was not reasonably practicable for him to secure the removal of the material.
(4)It is a defence for a person by whom the programme was produced or directed who is not shown to have intended to stir up racial hatred to prove that he did not know and had no reason to suspect—
(a)that the programme would be broadcast or included in a cable programme service, or
(b)that the circumstances in which the programme would be broadcast or so included would be such that racial hatred would be likely to be stirred up.
(5)It is a defence for a person by whom offending words or behaviour were used and who is not shown to have intended to stir up racial hatred to prove that he did not know and had no reason to suspect—
(a)that a programme involving the use of the offending material would be broadcast or included in a cable programme service, or
(b)that the circumstances in which a programme involving the use of the offending material would be broadcast, or so included, or in which a programme broadcast or so included would involve the use of the offending material, would be such that racial hatred would be likely to be stirred up.
(6)A person who is not shown to have intended to stir up racial hatred is not guilty of an offence under this section if he did not know, and had no reason to suspect, that the offending material was threatening, abusive or insulting.
(7)This section does not apply—
(a)to the broadcasting of a programme by the British Broadcasting Corporation or the Independent Broadcasting Authority, or
(b)to the inclusion of a programme in a cable programme service by the reception and immediate re-transmission of a broadcast by either of those authorities.
(8)The following provisions of the Cable and Broadcasting Act 1984 apply to an offence under this section as they apply to a " relevant offence " as defined in section 33(2) of that Act—section 33 (scripts as evidence),
section 34 (power to make copies of scripts and records),
section 35 (availability of visual and sound records);
and sections 33 and 34 of that Act apply to an offence under this section in connection with the broadcasting of a programme as they apply to an offence in connection with the inclusion of a programme in a cable programme service.
Racially inflammatory material

23Possession of racially inflammatory material
(1)A person who has in his possession written material which is threatening, abusive or insulting, or a recording of visual images or sounds which are threatening, abusive or insulting, with a view to—
(a)in the case of written material, its being displayed, published, distributed, broadcast or included in a cable programme service, whether by himself or another, or
(b)in the case of a recording, its being distributed, shown, played, broadcast or included in a cable programme service, whether by himself or another, is guilty of an offence if he intends racial hatred to be stirred up thereby or, having regard to all the circumstances, racial hatred is likely to be stirred up thereby.
(2)For this purpose regard shall be had to such display, publication, distribution, showing, playing, broadcasting or inclusion in a cable programme service as he has, or it may reasonably be inferred that he has, in view.
(3)In proceedings for an offence under this section it is a defence for an accused who is not shown to have intended to stir up racial hatred to prove that he was not aware of the content of the written material or recording and did not suspect, and had no reason to suspect, that it was threatening, abusive or insulting.
(4)This section does not apply to the possession of written material or a recording by or on behalf of the British Broadcasting Corporation or the Independent Broadcasting Authority or with a view to its being broadcast by either of those authorities.
24Powers of entry and search
(1)If in England and Wales a justice of the peace is satisfied by information on oath laid by a constable that there are reasonable grounds for suspecting that a person has possession of written material or a recording in contravention of section 23, the justice may issue a warrant under his hand authorising any constable to enter and search the premises where it is suspected the material or recording is situated.
(2)If in Scotland a sheriff or justice of the peace is satisfied by evidence on oath that there are reasonable grounds for suspecting that a person has possession of written material or a recording in contravention of section 23, the sheriff or justice may issue a warrant authorising any constable to enter and search the premises where it is suspected the material or recording is situated.
(3)A constable entering or searching premises in pursuance of a warrant issued under this section may use reasonable force if necessary.
(4)In this section " premises" means any place and, in particular, includes—
(a)any vehicle, vessel, aircraft or hovercraft,
(b)any offshore installation as defined in section 1(3) (b) of the Mineral Workings (Offshore Installations) Act 1971, and
(c)any tent or movable structure.
25Power to order forfeiture
(1)A court by or before which a person is convicted of—
(a)an offence under section 18 relating to the display of written material, or
(b)an offence under section 19, 21 or 23, shall order to be forfeited any written material or recording produced to the court and shown to its satisfaction to be written material or a recording to which the offence relates.
(2)An order made under this section shall not take effect—
(a)in the case of an order made in proceedings in England and Wales, until the expiry of the ordinary time within which an appeal may be instituted or, where an appeal is duly instituted, until it is finally decided or abandoned;
(b)in the case of an order made in proceedings in Scotland, until the expiration of the time within which, by virtue of any statute, an appeal may be instituted or, where such an appeal is duly instituted, until the appeal is finally decided or abandoned.
(3)For the purposes of subsection (2) (a)—
(a)an application for a case stated or for leave to appeal shall be treated as the institution of an appeal, and
(b)where a decision on appeal is subject to a further appeal, the appeal is not finally determined until the expiry of the ordinary time within which a further appeal may be instituted or, where a further appeal is duly instituted, until the further appeal is finally decided or abandoned.
(4)For the purposes of subsection (2) (b) the lodging of an application for a stated case or note of appeal against sentence shall be treated as the institution of an appeal.
Supplementary provisions

26Savings for reports of parliamentary or judicial proceedings
(1)Nothing in this Part applies to a fair and accurate report of proceedings in Parliament.
(2)Nothing in this Part applies to a fair and accurate report of proceedings publicly heard before a court or tribunal exercising judicial authority where the report is published contemporaneously with the proceedings or, if it is not reasonably practicable or would be unlawful to publish a report of them contemporaneously, as soon as publication is reasonably practicable and lawful.
27Procedure and punishment
(1)No proceedings for an offence under this Part may be instituted in England and Wales except by or with the consent of the Attorney General.
(2)For the purposes of the rules in England and Wales against charging more than one offence in the same count or information, each of sections 18 to 23 creates one offence.
(3)A person guilty of an offence under this Part is liable—
(a)on conviction on indictment to imprisonment for a term not exceeding two years or a fine or both ;
(b)on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both.
28Offences by corporations
(1)Where a body corporate is guilty of an offence under this Part and it is shown that the offence was committed with the consent or connivance of a director, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity, he as well as the body corporate is guilty of the offence and liable to be proceeded against and punished accordingly.
(2)Where the affairs of a body corporate are managed by its members, subsection (1) applies in relation to the acts and defaults of a member in connection with his functions of management as it applies to a director.
29Interpretation
In this Part—
" broadcast " means broadcast by wireless telegraphy (within the meaning of the Wireless Telegraphy Act 1949) for general reception, whether by way of sound broadcasting or television ;
" cable programme service " has the same meaning as in the Cable and Broadcasting Act 1984 ;
" distribute ", and related expressions, shall be construed in accordance with section 19(3) (written material) and section 21(2) (recordings);
" dwelling " means any structure or part of a structure occupied as a person's home or other living accommodation (whether the occupation is separate or shared with others) but does not include any part not so occupied, and for this purpose " structure " includes a tent, caravan, vehicle, vessel or other temporary or movable structure;
" programme" means any item which is broadcast or included in a cable programme service ;
" publish ", and related expressions, in relation to written material, shall be construed in accordance with section 19 (3);
" racial hatred " has the meaning given by section 17 ;
" recording " has the meaning given by section 21(2), and " play " and " show ", and related expressions, in relation to a recording, shall be construed in accordance with that provision;
" written material" includes any sign or other visible representation.
Part IV
Exclusion Orders

30Exclusion orders
(1)A court by or before which a person is convicted of an offence to which section 31 applies may make an order (an exclusion order) prohibiting him from entering any premises for the purpose of attending any prescribed football match there.
(2)No exclusion order may be made unless the court is satisfied that making such an order in relation to the accused would help to prevent violence or disorder at or in connection with prescribed football matches.
(3)An exclusion order may only be made—
(a)in addition to a sentence imposed in respect of the offence of which the accused is convicted, or
(b)in addition to a probation order or an order discharging him absolutely or conditionally.
(4)An exclusion order may be made as mentioned in subsection (3)(b) notwithstanding anything in sections 2, 7 and 13 of the Powers of Criminal Courts Act 1973 (which relate to orders there mentioned and their effect).
31Offences connected with football
(1)This section applies to any offence which fulfils one or more of the following three conditions.
(2)The first condition is that the offence was committed during any period relevant to a prescribed football match (as determined under subsections (6) to (8)), while the accused was at, or was entering or leaving or trying to enter or leave, the football ground concerned.
(3)The second condition is that the offence—
(a)involved the use or threat of violence by the accused towards another person and was committed while one or each of them was on a journey to or from an association football match,
(b)involved the use or threat of violence towards property and was committed while the accused was on such a journey, or
(c)was committed under section 5 or Part III while the accused was on such a journey.
(4)The third condition is that the offence was committed under section 1(3) or (4) or 1A(3) or (4) of the Sporting Events (Control of Alcohol etc.) Act 1985 (alcohol on journeys to or from certain sporting events) and the designated sporting event concerned was an association football match.
(5)For the purposes of subsection (3) a person's journey includes breaks (including overnight breaks).
(6)The period beginning 2 hours before the start of the match or (if earlier) 2 hours before the time at which it is advertised to start, and ending 1 hour after the end of it, is a period relevant to it.
(7)Where the match is advertised to start at a particular time on a particular day and is postponed to a later day, the period in the advertised day beginning 2 hours before and ending 1 hour after that time is also a period relevant to it.
(8)Where the match is advertised to start at a particular time on a particular day and does not take place, the period in that day beginning 2 hours before and ending 1 hour after that time is a period relevant to it.
32Effect of order
(1)An exclusion order shall have effect for such period as is specified in the order.
(2)The period shall be not less than three months or, in the case of a person already subject to an exclusion order, not less than three months plus the unexpired period of the earlier order or, if there is more than one earlier order, of the most recent order.
(3)A person who enters premises in breach of an exclusion order is guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding 1 month or a fine not exceeding level 3 on the standard scale or both.
(4)A constable who reasonably suspects that a person has entered premises in breach of an exclusion order may arrest him without warrant.
33Application to terminate order
(1)A person in relation to whom an exclusion order has had effect for at least one year may apply to the court by which it was made to terminate it.
(2)On such an application the court may, having regard to the person's character, his conduct since the order was made, the nature of the offence which led to it and any other circumstances of the case, either by order terminate the order (as from a date specified in the terminating order) or refuse the application.
(3)Where an application under this section is refused, a further application in respect of the exclusion order snail not be entertained if made within the period of six months beginning with the day of the refusal.
(4)The court may order the applicant to pay all or any part of the costs of an application under this section.
(5)In the case of an exclusion order made by a magistrates' court, the reference in subsection (1) to the court by which it was made includes a reference to any magistrates' court acting for the same petty sessions area as that court.
(6)Section 63(2) of the Magistrates' Courts Act 1980 (power to suspend or rescind orders) does not apply to an exclusion order.
34Information
(1)Where a court makes an exclusion order, the clerk of the court (in the case of a magistrates' court) or the appropriate officer (in the case of the Crown Court)—
(a)shall give a copy of it to the person to whom it relates,
(b)shall (as soon as reasonably practicable) send a copy of it to the chief officer of police for the police area in which the offence leading to the order was committed, and
(c)shall (as soon as reasonably practicable) send a copy of it to any prescribed person.
(2)Where a court terminates an exclusion order under section 28, the clerk of the court (in the case of a magistrates' court) or the appropriate officer (in the case of the Crown Court)—
(a)shall give a copy of the terminating order to the person to whom the exclusion order relates,
(b)shall (as soon as reasonably practicable) send a copy of the terminating order to the chief officer of police for the police area in which the offence leading to the exclusion order was committed, and
(c)shall (as soon as reasonably practicable) send a copy of the terminating order to any prescribed person.
(3)References in this section to the clerk of a magistrates' court shall be construed in accordance with section 141 of the Magistrates' Courts Act 1980, reading references to that Act as references to this section.
(4)In this section " prescribed " means prescribed by order made by the Secretary of State.
(5)The power to make an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
35Photographs
(1)The court by which an exclusion order is made may make an order which—
(a)requires a constable to take a photograph of the person to whom the exclusion order relates or to cause such a photograph to be taken, and
(b)requires that person to go to a specified police station not later than 7 clear days after the day on which the order under this section is made, and at a specified time of day or between specified times of day, in order to have his photograph taken.
(2)In subsection (1) " specified " means specified in the order made under this section.
(3)No order may be made under this section unless an application to make it is made to the court by or on behalf of the person who is the prosecutor in respect of the offence leading to the exclusion order.
(4)If the person to whom the exclusion order relates fails to comply with an order under this section a constable may arrest him without warrant in order that his photograph may be taken.
36Prescribed football matches
(1)In this Part " prescribed football match " means an association football match of any description prescribed by order made by the Secretary of State.
(2)The power to make an order under this section shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.
37Extension to other sporting events
(1)The Secretary of State may by order provide for sections 30 to 35 to apply as if—
(a)any reference to an association football match included a reference to a sporting event of a kind specified in the order, and
(b)any reference to a prescribed football match included a reference to such a sporting event of a description specified in the order.
(2)An order under subsection (1) may make such modifications of those sections, as they apply by virtue of the order, as the Secretary of State thinks fit.
(3)The power to make an order under this section shall be exercisable by statutory instrument, and no such order shall be made unless a draft of the order has been laid before and approved by resolution of each House of Parliament.
Part V
Miscellaneous and General

38Contamination of or interference with goods with intention of causing public alarm or anxiety, etc.
(1)It is an offence for a person, with the intention—
(a)of causing public alarm or anxiety, or
(b)of causing injury to members of the public consuming or using the goods, or
(c)of causing economic loss to any person by reason of the goods being shunned by members of the public, or
(d)of causing economic loss to any person by reason of steps taken to avoid any such alarm or anxiety, injury or loss,to contaminate or interfere with goods, or make it appear that goods have been contaminated or interfered with, or to place goods which have been contaminated or interfered with, or which appear to have been contaminated or interfered with, in a place where goods of that description are consumed, used, sold or otherwise supplied.
(2)It is also an offence for a person, with any such intention as is mentioned in paragraph (a), (c) or (d) of subsection (1), to threaten that he or another will do, or to claim that he or another has done, any of the acts mentioned in that subsection.
(3)It is an offence for a person to be in possession of any of the following articles with a view to the commission of an offence under subsection (1)—
(a)materials to be used for contaminating or interfering with goods or making it appear that goods have been contaminated or interfered with, or
(b)goods which have been contaminated or interfered with, or which appear to have been contaminated or interfered with.
(4)A person guilty of an offence under this section is liable—
(a)on conviction on indictment to imprisonment for a term not exceeding 10 years or a fine or both, or
(b)on summary conviction to imprisonment for a term not exceeding six months or a fine not exceeding the statutory maximum or both.
(5)In this section "goods" includes substances whether natural or manufactured and whether or not incorporated in or mixed with other goods.
(6)The reference in subsection (2) to a person claiming that certain acts have been committed does not include a person who in good faith reports or warns that such acts have been, or appear to have been, committed.
39Power to direct trespassers to leave land
(1)If the senior police officer reasonably believes that two or more persons have entered land as trespassers and are present there with the common purpose of residing there for any period, that reasonable steps have been taken by or on behalf of the occupier to ask them to leave and—
(a)that any of those persons has caused damage to property on the land or used threatening, abusive or insulting words or behaviour towards the occupier, a member of his family or an employee or agent of his, or
(b)that those persons have between them brought twelve or more vehicles on to the land, he may direct those persons, or any of them, to leave the land.
(2)If a person knowing that such a direction has been given which applies to him—
(a)fails to leave the land as soon as reasonably practicable,or
(b)having left again enters the land as a trespasser within the period of three months beginning with the day on which the direction was given, he commits an offence and is liable on summary conviction to imprisonment for a term not exceeding three months or a fine not exceeding level 4 on the standard scale, or both.
(3)A constable in uniform who reasonably suspects that a person is committing an offence under this section may arrest him without warrant.
(4)In proceedings for an offence under this section it is a defence for the accused to show—
(a)that his original entry on the land was not as a trespasser, or
(b)that he had a reasonable excuse for failing to leave the land as soon as reasonably practicable or, as the case may be, for again entering the land as a trespasser.
(5)In this section—
" land " does not include—
(a)buildings other than—
(i)agricultural buildings within the meaning of section 26(4) of the General Rate Act 1967, or
(ii)scheduled monuments within the meaning of the Ancient Monuments and Archaeological Areas Act 1979;
(b)(b) land forming part of a highway;
" occupier " means the person entitled to possession of the land by virtue of an estate or interest held by him ;
" property " means property within the meaning of section 10(1) of the Criminal Damage Act 1971;
" senior police officer " means the most senior in rank of the police officers present at the scene ;
" trespasser ", in relation to land, means a person who is a trespasser as against the occupier of the land ;
"vehicle" includes a caravan as defined in section 29(1) of the Caravan Sites and Control of Development Act 1960; and a person may be regarded for the purposes of this section as having the purpose of residing in a place notwithstanding that he has a home elsewhere.
40Amendments, repeals and savings
(1)Schedule 1, which amends the Sporting Events (Control of Alcohol etc.) Act 1985 and Part V of the Criminal Justice (Scotland) Act 1980, shall have effect.
(2)Schedule 2, which contains miscellaneous and consequential amendments, shall have effect.
(3)The enactments mentioned in Schedule 3 (which include enactments related to the subject matter of this Act but already obsolete or unnecessary) are repealed to the extent specified in column 3.
(4)Nothing in this Act affects the common law powers in England and Wales to deal with or prevent a breach of the peace.
(5)As respects Scotland, nothing in this Act affects any power of a constable under any rule of law.
41Commencement
(1)This Act shall come into force on such day as the Secretary of State may appoint by order made by statutory instrument, and different days may be appointed for different provisions or different purposes.
(2)Nothing in a provision of this Act applies in relation to an offence committed or act done before the provision comes into force.
(3)Where a provision of this Act comes into force for certain purposes only, the references in subsection (2) to the provision are references to it so far as it relates to those purposes.
42Extent
(1)The provisions of this Act extend to England and Wales except so far as they—
(a)amend or repeal an enactment which does not so extend, or
(b)relate to the extent of provisions to Scotland or Northern Ireland.
(2)The following provisions of this Act extend to Scotland— in Part I, section 9(2) except paragraph (a);in Part II, sections 12 and 14 to 16;
Part III
Part V, except sections 38, 39, 40(4), subsections (1) and (3) of this section and any provision amending or repealing an enactment which does not extend to Scotland
(3)The following provisions of this Act extend to Northern Ireland—sections 38, 41, this subsection, section 43 and paragraph 6 of Schedule 2.
43Short title
This Act may be cited as the Public Order Act 1986.

###

1Exception to the right to buy with respect to dwelling-houses for persons of pensionable age
In Schedule 5 to the Housing Act 1985 (exceptions to the right to buy: certain dwelling-houses for persons of pensionable age), there shall be substituted for paragraph 11—
“11(1)The right to buy does not arise if the dwelling-house—
(a)is particularly suitable for occupation by persons of pensionable age, having regard—
(i)to its location, and
(ii)to its size, design, heating system and other major features so far as those have been provided by the landlord, a predecessor of the tenant or a person qualified to succeed the tenant by virtue of Part IV of the Housing Act 1985,
(b)was let to the tenant or a predecessor in title of his for occupation by a person of pensionable age or a physically disabled person (whether the tenant or predecessor or another person).
(2)In determining whether a dwelling is particularly suitable, regard shall be had as to whether the dwelling—
(a)is easily accessible on foot;
(b)is on one level;
(c)being a flat located above ground floor, access by lift is available;
(d)has no more than two bedrooms ;
(e)has a heating system serving the living room and at least one bedroom.”.
2Discount on right to buy and similar sales
(1)In section 129 of the Housing Act 1985 (discount on exercise of right to buy), for subsections (1) and (2) substitute—
“(1)Subject to the following provisions of this Part, a person exercising the right to buy is entitled to a discount of a percentage calculated by reference to the period which is to be taken into account in accordance with Schedule 4 (qualifying period for right to buy and discount).
(2)The discount is, subject to any order under subsection (2A)—
(a)in the case of a house, 32 per cent, plus one per cent. for each complete year by which the qualifying period exceeds two years, up to a maximum of 60 per cent.;
(b)in the case of a flat, 44 per cent, plus two per cent. for each complete year by which the qualifying period exceeds two years, up to a maximum of 70 per cent.
(2A)The Secretary of State may by order made with the consent of the Treasury provide that, in such cases as may be specified in the order—
(a)the minimum percentage discount,
(b)the percentage increase for each complete year of the qualifying period after the first two, or
(c)the maximum percentage discount, shall be such percentage, higher than that specified in subsection (2), as may be specified in the order.
(2B)An order
(a)may make different provision with respect to different cases or descriptions of case,
(b)may contain such incidental, supplementary or transitional provisions as appear to the Secretary of State to be necessary or expedient, and
(c)shall be made by statutory instrument and shall not be made unless a draft of it has been laid before and approved by resolution of each House of Parliament.”.
(2)The amendment made by subsection (1) does not apply where—
(a)the tenant's notice claiming to exercise the right to buy or, as the case may be, to acquire an additional share under a shared ownership lease was served before the commencement of that subsection, and
(b)the landlord has before commencement served its notice as to the terms of exercise of that right, that is, its notice under section 125 of, or paragraph 1(3) of Schedule 8 to, the Housing Act 1985, but without prejudice to the tenant's right to withdraw the notice served before commencement and serve a new notice.
(3)In the following provisions (which in the case of disposals at a discount require a covenant for repayment of a proportion of the discount if the dwelling-house is disposed of within five years)—section 35(2) of the Housing Act 1985 (voluntary disposals by local authorities),
section 155(2) of that Act (disposals in pursuance of the right to buy),
section 155(3) of that Act (disposals in pursuance of the right to be granted a shared ownership lease), and
paragraph 1(2) of Schedule 2 to the Housing Associations Act 1985 (voluntary disposals by registered housing associations), for " five years " substitute
“three years”
and for " 20 per cent." substitute
“one-third”.
(4)A conveyance or lease containing the covenant required by any of the provisions mentioned in subsection (3) which was executed before the amendments made by that subsection came into force shall, provided no amount was then or had previously been payable under the covenant, have effect with such modifications as may be necessary to bring it into conformity with the amendments.
3Discount on exercise of right to purchase in Scotland
(1)In section 1 (secure tenant's right to purchase) of the Tenants' Rights, Etc. (Scotland) Act 1980, in subsection (5), after " (b) " insert— “subject to an order under subsection (5B) below,
(2)After subsection (5A) of the said section 1 insert—
“(5B)The Secretary of State may by order made with the consent of the Treasury provide that, in such cases as may be specified in the order—
(a)the minimum percentage discount,
(b)the percentage increase for each complete year of the qualifying period after the first two, or
(c)the maximum percentage discount, shall be such percentage, higher than that specified in subsection (5)(b), as may be specified in the order.
(5C)An order—
(a)may make different provision with respect to different cases or descriptions of case,
(b)may contain such incidental, supplementary or transitional provisions, including such amendments to the provisions of section 9A (application of Part I when dwelling-house is repurchased as defective) below, as appear to the Secretary of State to be necessary or expedient, and
(c)shall be made by statutory instrument and shall not be made unless a draft of it has been laid before and approved by resolution of each House of Parliament.”.
4Service charges and other contributions payable after exercise of right to buy
(1)In section 125 of the Housing Act 1985 (landlord's notice of purchase price and other matters), for subsection (4) (notice to include estimate of amount of service charges) substitute—
“(4)Where the notice states provisions which would enable the landlord to recover from the tenant—
(a)service charges, or
(b)improvement contributions, the notice shall also contain the estimates and other information required by section 125A (service charges) or 125B (improvement contributions).”.
(2)After that section insert— “Estimates and Information about service charges.
125A(1)A landlord's notice under section 125 shall state as regards service charges (excluding, in the case of a flat, charges to which subsection (2) applies)—
(a)the landlord's estimate of the average annual amount (at current prices) which would be payable in respect of each head of charge in the reference period, and
(b)the aggregate of those estimated amounts, and shall contain a statement of the reference period adopted for the purpose of the estimates.
(2)A landlord's notice under section 125 given in respect of a flat shall, as regards service charges in respect of repairs (including works for the making good of structural defects), contain—
(a)the estimates required by subsection (3), together with a statement of the reference period adopted for the purpose of the estimates, and
(b)a statement of the effect of—paragraph 16B of Schedule 6 (which restricts by reference to the estimates the amounts payable by the tenant), and section 450A and the regulations made under that section (right to a loan in respect of certain service charges).
(3)The following estimates are required for works in respect of which the landlord considers that costs may be incurred in the reference period—
(a)for works itemised in the notice, estimates of the amount (at current prices) of the likely cost of, and of the tenant's likely contribution in respect of, each item, and the aggregate amounts of those estimated costs and contributions, and
(b)for works not so itemised, an estimate of the average annual amount (at current prices) which the landlord considers is likely to be payable by the tenant.
125B(1)A landlord's notice under section 125 given in respect of a flat shall, as regards improvement contributions, contain—
(a)the estimates required by this section, together with a statement of the reference period adopted for the purpose of the estimates, and
(b)a statement of the effect of paragraph 16C of Schedule 6 (which restricts by reference to the estimates the amounts payable by the tenant).
(2)Estimates are required for works in respect of which the landlord considers that costs may be incurred in the reference period.
(3)The works to which the estimates relate shall be itemised and the estimates shall show—
(a)the amount (at current prices) of the likely cost of, and of the tenant's likely contribution in respect of, each item, and
(b)the aggregate amounts of those estimated costs and contributions.
125C(1)The reference period for the purposes of the estimates required by section 125A or 125B is the period—
(a)beginning on such date not more than six months after the notice is given as the landlord may reasonably specify as being a date by which the conveyance will have been made or the lease granted, and
(b)ending five years after that date or, where the notice states that the conveyance or lease will provide for a service charge or improvement contribution to be calculated by reference to a specified annual period, with the end of the fifth such period beginning after that date.
(2)For the purpose of the estimates it shall be assumed that the conveyance will be made or the lease granted at the beginning of the reference period on the terms stated in the notice.”.
(3)In section 127 of the Housing Act 1985 (valuation of dwelling-house for purposes of right to buy) in subsection (1) (basis of valuation), after paragraph (b) insert— “, and
(c)on the assumption that any service charges or improvement contributions payable will not be less than the amounts to be expected in accordance with the estimates contained in the landlord's notice under section 125.”.
(4)In Part III of Schedule 6 to the Housing Act 1985 (terms of lease granted in pursuance of right to buy), after paragraph 16 insert— “Service charges and other contributions payable by the tenant
16A(1)The lease may require the tenant to bear a reasonable part of the costs incurred by the landlord—
(a)in discharging or insuring against the obligations imposed by the covenants implied by virtue of paragraph 14(2) (repairs, making good structural defects, provision of services, etc.), or
(b)in insuring against the obligations imposed by the covenant implied by virtue of paragraph 14(3) (rebuilding or reinstatement, etc.), and to the extent that by virtue of paragraph 15(3) (effect of provision of superior lease) such obligations are not imposed on the landlord, to bear a reasonable part of the costs incurred by the landlord in contributing to costs incurred by a superior landlord or other person in discharging or, as the case may be, insuring against obligations to the like effect.
(2)Where the lease requires the tenant to contribute to the costs of insurance, it shall provide that the tenant is entitled to inspect the relevant policy at such reasonable times as may be specified in the lease.
(3)Where the landlord does not insure against tile obligations imposed by the covenant implied by virtue of paragraph 14(3), or, as the case may be, the superior landlord or other person does not insure against his obligations to the like effect, the lease may require the tenant to pay a reasonable sum in place of the contribution he could be required to make if there were insurance.
(4)Where in any case the obligations imposed by the covenants implied by virtue of paragraph 14(2) or (3) are modified in accordance with paragraph 14(4) (power of county court to authorise modification), the references in this paragraph are to the obligations as so modified.
(5)This paragraph has effect subject to paragraph 16B (restrictions in certain cases as regards costs incurred in the initial period of the lease).
16B(1)Where a lease of a flat requires the tenant to pay service charges in respect of repairs (including works for the making good of structural defects), his liability in respect of costs incurred in the initial period of the lease is restricted as follows.
(2)He is not required to pay in respect of works itemised in the estimates contained in the landlord's notice under section 125 any more than the amount shown as his estimated contribution in respect of that item, together with an inflation allowance.
(3)He is not required to pay in respect of works not so itemised at a rate exceeding—
(a)as regards parts of the initial period falling within the reference period for the purposes of the estimates contained in the landlord's notice under section 125, the estimated annual average amount shown in the estimates;
(b)as regards parts of the initial period not falling within that reference period, the average rate produced by averaging over the reference period all works for which estimates are contained in the notice; together, in each case, with an inflation allowance.
(4)The initial period of the lease for the purposes of this paragraph begins with the grant of the lease and ends five years after the grant, except that—
(a)if the lease includes provision for service charges to be payable in respect of costs incurred in a period before the grant of the lease, the initial period begins with the beginning of that period :
(b)if the lease provides for service charges to be calculated by reference to a specified annual period, the initial period continues until the end of the fifth such period beginning after the grant of the lease; and
(c)if the tenant served notice under section 142 deferring completion, the initial period ends on the date on which it would have ended if the lease had been granted on the date on which the notice was served.
16C(1)Where a lease of a flat requires the tenant to pay improvement contributions, his liability in respect of costs incurred in the initial period of the lease is restricted as follows.
(2)He is not required to make any payment in respect of works for which no estimate was given in the landlord's notice under section 125.
(3)He is not required to pay in respect of works for which an estimate was given in that notice any more than the amount shown as his estimated contribution in respect of that item, together with an inflation allowance.
(4)The initial period of the lease for the purposes of this paragraph begins with the grant of the lease and ends five years after the grant, except that—
(a)if the lease includes provision for improvement contributions to be payable in respect of costs incurred in a period before the grant of the lease, the initial period begins with the beginning of that period;
(b)if the lease provides for improvement contributions to be calculated by reference to a specified annual period, the initial period continues until the end of the fifth such period beginning after the grant of the lease ; and
(c)if the tenant served notice under section 142 deferring completion, the initial period ends on the date on which it would have ended if the lease had been granted on the date on which the notice was served.
16D(1)The Secretary of State may by order prescribe—
(a)the method by which inflation allowances for the purposes of paragraph 16B or 16C are to be calculated by reference to published statistics;and
(b)the information to be given to a tenant when he is asked to pay a service charge or improvement contribution to which the provisions of paragraph 16B or 16C are or may be relevant.
(2)An order—
(a)may make different provision for different cases or descriptions of case, including different provision for different areas;
(b)may contain such incidental, supplementary or transitional provisions as the Secretary of State thinks appropriate; and
(c)shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”.
(5)For paragraph 18 of Schedule 6 to the Housing Act 1985 (avoidance of certain provisions relating to service charges) substitute—
“18Where the dwelling-house is a flat, a provision of the lease or of an agreement collateral to it is void in so far as it purports—
(a)to authorise the recovery of such a charge as is mentioned in paragraph 16A (contributions in respect of repairs, etc.) otherwise than in accordance with that paragraph and paragraph 16B (restrictions in initial period of lease); or
(b)to authorise the recovery of any charge in respect of costs incurred by the landlord—
(i)in discharging the obligations imposed by the covenant implied by paragraph 14(3) (rebuilding or reinstatement, &c.), or those obligations as modified in accordance with paragraph 14(4), or
(ii)in contributing to costs incurred by a superior landlord or other person in discharging obligations to the like effect; or
(c)to authorise the recovery of an improvement contribution otherwise than in accordance with paragraph 16C (restrictions in initial period of lease).”.
(6)The amendments in this section do not apply where—
(a)the tenant's notice claiming to exercise the right to buy was served before the commencement of this section, and
(b)the landlord has before commencement served his notice under section 125 of the Housing Act 1985 (notice of terms of exercise of right); but without prejudice to the tenant's right to withdraw the notice served before commencement and serve a new notice.
5Loans in respect of service charges
In Part XIV of the Housing Act 1985 (loans for acquisition or improvement of housing), after section 450 insert— “Loans in respect of service charges Right to a loan in certain cases after exercise of right to buy.
450A(1)The Secretary of State may by regulations provide that where—
(a)a lease of a flat has been granted in pursuance of Part V (the right to buy), and
(b)the landlord is the housing authority who granted the lease or another housing authority, the tenant has, in such circumstances as may be prescribed, a right to a loan in respect of service charges to which this section applies.
(2)This section applies to service charges in respect of repairs (whether to the flat, the building in which it is situated or any other building or land) which are payable in the period beginning with the grant of the lease and ending with the tenth anniversary of the grant or, where the lease provides for service charges to be payable by reference to a specified annual period, with the end of the tenth such period beginning after the grant of the lease.
(3)The regulations may provide that the right—
(a)arises only in respect of so much of a service charge as exceeds a minimum qualifying amount and does not exceed a maximum qualifying amount, and
(b)does not arise unless the amount thus qualifying for a loan itself exceeds a minimum amount, the amounts being either prescribed or ascertained in a prescribed maimer.
(4)The regulations shall provide that the right is—
(a)where the landlord is a housing association, a right to an advance from the Housing Corporation, and
(b)in any other case, a right to leave the whole or part of the service charge outstanding.
(5)The regulations may, as regards the procedure for exercising the right, provide—
(a)that a demand for service charges in respect of repairs shall inform the tenant whether, in the landlord's opinion, he is entitled to a loan and, if he is, what he must do to claim it;
(b)that the right must be claimed within a prescribed period of the demand ; and
(c)that on the right being claimed the lender shall inform the tenant of the terms of the loan and of the prescribed period within which the tenant may accept the offer.
(6)In this section—
" housing authority" includes any housing association within section 80 (the landlord condition for secure tenancies); and
" repairs " includes works for making good a structural defect.
Power to make loans in other cases.
450B(1)The Secretary of State may by regulations provide that where—
(a)a housing authority is the landlord of a flat under a long lease granted or assigned by the authority or by another housing authority, and
(b)the tenant is liable under the terms of the lease to pay service charges in respect of repairs (whether to the flat, the building in which it is situated or any other building or land), the landlord or, where the landlord is a housing association, the Housing Corporation may, in such circumstances as may be prescribed, make a loan to the tenant in respect of the service charges.
(2)The regulations shall provide that the power is—
(a)where the landlord is a housing association, a power of the Housing Corporation to make an advance, and
(b)in any other case, a power of the landlord to leave the whole or part of the service charge outstanding.
(3)Where the tenant is entitled to a loan in pursuance of regulations under section 450A, the power conferred by regulations under this section may be exercised in respect of any part of the service charge which does not qualify for a loan under that section.
(4)In this section—
"housing authority" includes any housing association within section 80 (the landlord condition for secure tenancies); and
"repairs" includes works for making good a structural defect.
(5)This section does not affect any other power of the landlord, or the Housing Corporation, to make loans. Supplementary provisions as to regulations under s. 450A or 450B.
450C(1)This section applies to regulations under section 450A or 450B (regulations conferring right to loan, or power to make loan, in respect of service charges).
(2)The regulations may provide that the right or, as the case may be, the power does not arise in the case of any prescribed description of landlord.
(3)The regulations shall provide that the loan—
(a)in the case of a loan made in pursuance of regulations under section 450A (the right to a loan), shall be on such terms as may be prescribed, and
(b)in the case of a loan made by virtue of regulations under section 450B (power to make loan), shall be on such terms as the lender may determine subject to any provision made by the regulations ; and shall, in either case, be secured by a mortgage of the flat in question, but may be made whether or not the flat is adequate security for the loan.
(4)The regulations may—
(a)as regards the rate of interest payable on the loan, either prescribe the rate or provide that the rate shall be such reasonable rate as may be determined by the lender or, where the lender is a local authority, provide that Schedule 16 applies (local authority mortgage interest rates);
(b)as regards administrative expenses of the lender in connection with a loan, provide that the lender may charge such expenses to the borrower, to the extent that they do not exceed such amount as may be prescribed, and that the expenses so charged may, at the option of the borrower in the case of a loan under section 450A and at the option of the lender in the case of a loan under section 450B, be added to the amount of the loan.
(5)The regulations may apply whenever the lease in question was granted or assigned and whenever the service charge in question became payable.
(6)The regulations—
(a)may make different provision for different cases or descriptions of case, including different provision for different areas ;
(b)may contain such incidental, supplementary and transitional provisions as the Secretary of State considers appropriate ; and
(c)shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”.
Other provisions with respect to public sector housing

6Consultation before disposal to private sector landlord
(1)In Part IV of the Housing Act 1985 (secure tenancies and rights of secure tenants), after section 106 insert— “Consultation before disposal to private sector landlord.
106A(1)The provisions of Schedule 3A have effect with respect to the duties of—
(a)a local authority proposing to dispose of dwelling-houses subject to secure tenancies, and
(b)the Secretary of State in considering whether to give his consent to such a disposal, to have regard to the views of tenants liable as a result of the disposal to cease to be secure tenants.
(2)In relation to a disposal to which that Schedule applies, the provisions of that Schedule apply in place of the provisions of section 105 (consultation on matters of housing management).”.
(2)After Schedule 3 to the Housing Act 1985 insert as Schedule 3A the Schedule set out in Schedule 1 to this Act (consultation before disposal to private sector landlord).
(3)The amendments made by this section apply to disposals after the commencement of this section.
7Certificate of fair rent with a view to disposal by public sector body
(1)In section 69 of the Rent Act 1977 (certificates of fair rent), after subsection (1) insert—
“(1A)A public sector body to which this subsection applies may, with a view to the disposal of an interest in a dwelling-house, apply to the rent officer for a certificate specifying a rent which in the opinion of the rent officer would be a fair rent under a regulated tenancy of the dwelling-house—
(a)in its present condition, or
(b)after the completion of works of improvement, conversion or repair.
(1B)In subsection (1A) " public sector body " means an authority or body within section 80(1) of the Housing Act 1985 (the landlord condition for secure tenancies) other than the Housing Corporation, a housing association or a housing trust which is a charity. In this subsection " housing association", " housing trust " and " charity " have the same meaning as in Part IV of the Housing Act 1985.
(1C)A certificate under subsection (1) or (1A) shall be known as a certificate of fair rent,”.
(2)In section 69(1) of the Rent Act 1977—
(a)after " improvements ", in both places where it occurs, insert
“or repairs”, and
(b)at the end, add— “No application shall be made under this subsection if an application could be made under subsection (1A) below.
8Preservation of right to buy on disposal to private sector landlord
(1)In Part V of the Housing Act 1985 (the right to buy), after section 171 insert— “Preservation of right to buy on disposal to private sector landlord Cases in which right to buy is preserved.
171A(1)The provisions of this Part continue to apply where a person ceases to be a secure tenant of a dwelling-house by reason of the disposal by the landlord of an interest in the dwelling-house to a person who is not an authority or body within section 80 (the landlord condition for secure tenancies).
(2)In the following provisions of this Part—
(a)references to the preservation of the right to buy and to a person having the preserved right to buy are to the continued application of the provisions of this Part by virtue of this section and to a person in relation to whom those provisions so apply;
(b)" qualifying disposal" means a disposal in relation to which this section applies, and
(c)the " former secure tenant" and the " former landlord " are the persons mentioned in subsection (1).
(3)This section does not apply—
(a)where the former landlord was a person against whom the right to buy could not be exercised by virtue of paragraph 1, 2 or 3 of Schedule 5 (charities and certain housing associations), or
(b)in such other cases as may be excepted from the operation of this section by order of the Secretary of State.
(4)Orders under subsection (3) (b)—
(a)may relate to particular disposals and may make different provision with respect to different cases or descriptions of case, including different provision for different areas, and
(b)shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament. Extent of preserved right: qualifying persons and dwelling-houses.
171B(1)A person to whom this section applies has the preserved right to buy so long as he occupies the relevant dwelling-house as his only or principal home, subject to the following provisions of this Part.
(2)References in this Part to a "qualifying person " and " qualifying dwelling-house ", in relation to the preserved right to buy, are to a person who has that right and to a dwelling-house in relation to which a person has that right.
(3)The following are the persons to whom this section applies—
(a)the former secure tenant, or in the case of a joint tenancy, each of them ;
(b)a qualifying successor as defined in subsection (4); and
(c)a person to whom a tenancy of a dwelling house is granted jointly with a person who has the preserved right to buy in relation to that dwelling-house.
(4)The following are qualifying successors for this purpose—
(a)where the former secure tenancy was not a joint tenancy, a person who, on the death of the former secure tenant, becomes by virtue of paragraph 2 or 3 of Part I of Schedule 1 to the Rent Act 1977 (surviving spouse or member of deceased tenant's family) the statutory tenant of a dwelling-house in relation to which the former secure tenant had the preserved right to buy immediately before his death ;
(b)a person who becomes the tenant of a dwelling-house in pursuance of—
(i)a property adjustment order under section 24 of the Matrimonial Causes Act 1973, or
(ii)an order under Schedule 1 to the Matrimonial Homes Act 1983 transferring the tenancy, in place of a person who had the preserved right to buy in relation to that dwelling-house.
(5)The relevant dwelling-house is in the first instance—
(a)in relation to a person within paragraph (a) of subsection (3), the dwelling-house which was the subject of the qualifying disposal;
(b)in relation to a person within paragraph (b) of that subsection, the dwelling-house of which he became the statutory tenant or tenant as mentioned in subsection (4)(a) or (b);
(c)in relation to a person within paragraph (c) of subsection (3), the dwelling-house of which he became a joint tenant as mentioned in that paragraph.
(6)If a person having the preserved right to buy becomes the tenant of another dwelling-house in place of the relevant dwelling-house (whether the new dwelling-house is entirely different or partly or substantially the same as the previous dwelling-house) and the landlord is the same person as the landlord of the previous dwelling-house or, where that landlord was a company, is a connected company, the new dwelling-house becomes the relevant dwelling-house for the purposes of the preserved right to buy. For this purpose " connected company " means a subsidiary or holding company within the meaning of section 736 of the Companies Act 1985. Modifications of this Part in relation to preserved right.
171C(1)Where the right to buy is preserved, the provisions of this Part have effect subject to such exceptions, adaptations and other modifications as may be prescribed by regulations made by the Secretary of State.
(2)The regulations may in particular provide—
(a)that paragraphs 5 to 11 of Schedule 5 (certain exceptions to the right to buy) do not apply;
(b)that the right to a mortgage is exercisable against the former landlord or, if the former landlord was a housing association, against the Housing Corporation;
(c)that the provisions of this Part relating to the right to be granted a shared ownership lease do not apply; and
(d)that the landlord is not required to but may include a covenant for the repayment of discount, provided its terms are no more onerous than those of the covenant provided for in section 155.
(3)The prescribed exceptions, adaptations and other modifications shall take the form of textual amendments of the provisions of this Part as they apply in cases where the right to buy is preserved; and the first regulations, and any subsequent consolidating regulations, shall set out the provisions of this Part as they so apply.
(4)The regulations—
(a)may make different provision for different cases or descriptions of case, including different provision for different areas,
(b)may contain such incidental, supplementary and transitional provisions as the Secretary of State considers appropriate, and
(c)shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament. Subsequent dealings: disposal of landlord's interest in qualifying dwelling-house.
171D(1)The disposal by the landlord of an interest in the qualifying dwelling-house, whether his whole interest or a lesser interest, does not affect the preserved right to buy, unless—
(a)as a result of the disposal an authority or body within section 80(1) (the landlord condition for secure tenancies) becomes the landlord of the qualifying person or persons, or
(b)paragraph 6 of Schedule 9A applies (effect of failure to register entry protecting preserved right to buy), in which case the right to buy ceases to be preserved.
(2)The disposal by the landlord of a qualifying dwelling-house of less than his whole interest as landlord of the dwelling-house, or in part of it, requires the consent of the Secretary of State, unless the disposal is to the qualifying person or persons.
(3)Consent may be given in relation to a particular disposal or generally in relation to disposals of a particular description and may, in either case, be given subject to conditions.
(4)A disposal made without the consent required by subsection (2) is void, except in a case where, by reason of a failure to make the entries on the land register or land charges register required by Schedule 9A, the preserved right to buy does not bind the person to whom the disposal is made. Subsequent dealings: termination of landlord's interest in qualifying dwelling-house.
171E(1)On the termination of the landlord's interest in the qualifying dwelling-house—
(a)on the occurrence of an event determining his estate or interest, or by re-entry on a breach of condition or forfeiture, or
(b)where the interest is a leasehold interest, by notice given by him or a superior landlord, on the expiry or surrender of the term, or otherwise (subject to subsection (2)), the right to buy ceases to be preserved.
(2)The termination of the landlord's interest by merger on his acquiring a superior interest, or on the acquisition by another person of the landlord's interest together with a superior interest, does not affect the preserved right to buy, unless—
(a)as a result of the acquisition an authority or body within section 80(1) (the landlord condition for secure tenancies) becomes the landlord of the qualifying person or persons, or
(b)paragraph 6 of Schedule 9A applies (effect of failure to register entry protecting preserved right to buy), in which case the right to buy ceases to be preserved.
(3)Where the termination of the landlord's interest as mentioned in subsection (1) is caused by the act or omission of the landlord, a qualifying person who is thereby deprived of the preserved right to buy is entitled to be compensated by him. Subsequent dealings: transfer of qualifying person to alternative accommodation.
171FThe court shall not order a qualifying person to give up possession of the qualifying dwelling-house in pursuance of section 98(l)(a) of the Rent Act 1977 (suitable alternative accommodation) unless the court is satisfied—
(a)that the preserved right to buy will, by virtue of section 171B(6) (accommodation with same landlord or connected company), continue to be exercisable in relation to the dwelling-house offered by way of alternative accommodation and that the interest of the landlord in the new dwelling-house will be—
(i)where the new dwelling-house is a house, not less than the interest of the landlord in the existing dwelling-house, or
(ii)where the new dwelling-house is a flat, not less than the interest of the landlord in the existing dwelling-house or a term of years of which 80 years or more remain unexpired, whichever is the less ; or
(b)that the landlord of the new dwelling-house will be an authority or body within section 80(1) (the landlord condition for secure tenancies). Land registration and related matters.
171GSchedule 9A has effect with respect to registration of title and related matters arising in connection with the preservation of the right to buy. Disposal after notice claiming to exercise right to buy, etc.
171H(1)Where notice has been given in respect of a dwelling-house claiming to exercise the right to buy or the right to a mortgage and before the completion of the exercise of that right the dwelling-house is the subject of—
(a)a qualifying disposal, or
(b)a disposal to which section 171D(l)(a) or 171E(2)(a) applies (disposal to authority or body satisfying landlord condition for secure tenancies), all parties shall, subject to subsection (2), be in the same position as if the disponee had become the landlord before the notice was given and had been given that notice and any further notice given by the tenant to the landlord and had taken all steps which the landlord had taken.
(2)If the circumstances after the disposal differ in any material respect, as for example where—
(a)the interest of the disponee in the dwelling house after the disposal differs from that of the disponor before the disposal, or
(b)the right to a mortgage becomes exercisable against the Housing Corporation rather than the former landlord, or vice versa, or
(c)any of the provisions of Schedule 5 (exceptions to the right to buy) becomes or ceases to be applicable, all those concerned shall, as soon as practicable after the disposal, take all such steps (whether by way of amending or withdrawing and re-serving any notice or extending any period or otherwise) as may be requisite for the purpose of securing that all parties are, as nearly as may be, in the same position as they would have been if those circumstances had obtained before the disposal.”.
(2)After Schedule 9 to the Housing Act 1985 insert as Schedule 9A the Schedule set out in Schedule 2 to this Act (land registration and related matters where right to buy preserved).
(3)The amendments made by this section apply to qualifying disposals on or after the commencement of this section.
9Redevelopment of dwelling-house subject to secure tenancy
(1)In Schedule 2 to the Housing Act 1985 (grounds for possession of dwelling-houses let under secure tenancies), in Part II (grounds on which court may order possession if suitable alternative accommodation is available), after ground 10 (redevelopment by landlord) insert— “Ground 10A The dwelling-house is in an area which is the subject of a redevelopment scheme approved by the Secretary of State or the Housing Corporation in accordance with Part V of this Schedule and the landlord intends within a reasonable time of obtaining possession to dispose of the dwelling-house in accordance with the scheme. or Part of the dwelling-house is in such an area and the landlord intends within a reasonable time of obtaining possession to dispose of that part in accordance with the scheme and for that purpose reasonably requires possession of the dwelling-house.
(2)At the end of that Schedule insert— “Part V Approval of Redevelopment Schemes for Purposes of Ground 10A
1(1)The Secretary of State may, on the application of the landlord, approve for the purposes of ground 10A in Part II of this Schedule a scheme for the disposal and redevelopment of an area of land consisting of or including the whole or part of one or more dwelling-houses.
(2)For this purpose—
(a)" disposal" means a disposal of any interest in the land (including the grant of an option), and
(b)" redevelopment" means the demolition or reconstruction of buildings or the carrying out of other works to buildings or land ; and it is immaterial whether the disposal is to precede or follow the redevelopment.
(3)The Secretary of State may on the application of the landlord approve a variation of a scheme previously approved by him and may, in particular, approve a variation adding land to the area subject to the scheme.
2(1)Where a landlord proposes to apply to the Secretary of State for the approval of a scheme or variation it shall serve a notice in writing on any secure tenant of a dwelling-house affected by the proposal stating—
(a)the main features of the proposed scheme or, as the case may be, the scheme as proposed to be varied,
(b)that the landlord proposes to apply to the Secretary of State for approval of the scheme or variation, and
(c)the effect of such approval, by virtue of section 84 and ground 10A in Part II of this Schedule, in relation to proceedings for possession of the dwelling-house, and informing the tenant that he may, within such period as the landlord may allow (which shall be at least 28 days from service of me notice), make representations to the landlord about the proposal.
(2)The landlord shall not apply to the Secretary of State until it has considered any representations made to it within that period.
(3)In the case of a landlord to which section 105 applies (consultation on matters of housing management) the provisions of this paragraph apply in place of the provisions of that section in relation to the approval or variation of a redevelopment scheme.
3(1)In considering whether to give his approval to a scheme or variation the Secretary of State shall take into account, in particular—
(a)the effect of the scheme on the extent and character of housing accommodation in the neighbourhood,
(b)over what period of time it is proposed that the disposal and redevelopment will take place in accordance with the scheme, and
(c)to what extent the scheme includes provision for housing provided under the scheme to be sold or let to existing tenants or persons nominated by the landlord; and he shall take into account any representations made to him and, so far as they are brought to his notice, any representations made to the landlord.
(2)The landlord shall give to the Secretary of State such information as to the representations made to it, and other relevant matters, as the Secretary of State may require.
4The Secretary of State shall not approve a scheme or variation so as to include in the area subject to the scheme—
(a)part only of one or more dwelling-houses, or
(b)one or more dwelling-houses not themselves affected by the works involved in redevelopment but which are proposed to be disposed of along with other land which is so affected, unless he is satisfied that the inclusion is justified in the circumstances.
5(1)Approval may be given subject to conditions and may be expressed to expire after a specified period.
(2)The Secretary of State, on the application of the landlord or otherwise, may vary an approval so as to—
(a)add, remove or vary conditions to which the approval is subject; or
(b)extend or restrict the period after which the approval is to expire.
(3)Where approval is given subject to conditions, the landlord may serve a notice under section 83 (notice of proceedings for possession) specifying ground 10A notwithstanding that the conditions are not yet fulfilled but the court shall not make an order for possession on that ground unless satisfied that they are or will be fulfilled.
6Where the landlord is a registered housing association, the Housing Corporation, and not the Secretary of State, has the functions conferred by this Part of this Schedule.
7In this Part of this Schedule references to the landlord of a dwelling-house include any authority or body within section 80 (the landlord condition for secure tenancies) having an interest of any description in the dwelling-house.”.
(3)Section 29 of the Land Compensation Act 1973 (home loss payments) is amended as follows—
(a)in subsection (1) (circumstances in which, and persons by whom, payment to be made) after paragraph (d) insert—
“(e)the making of an order for possession on ground 10 or 10A in Part II of Schedule 2 to the Housing Act 1985 ;”; and
(b)in the same subsection, after paragraph (iv) insert—
“(v)where paragraph (e) applies, the landlord.and”;
(c)in subsection (4) (interests and rights to which the section applies), after paragraph (d) insert—
“(e)a right to occupy the dwelling under a licence to which Part IV of the Housing Act 1985 (secure tenancies) applies.”.
(4)In section 32 of the Land Compensation Act 1973 (supplementary provisions about home loss payments), after subsection (7A) insert—
“(7B)Where a landlord obtains possession by agreement of a dwelling subject to a secure tenancy within the meaning of Part IV of the Housing Act 1985 and—
(a)notice of proceedings for possession of the dwelling has been served, or might have been served, specifying ground 10 or 10A in Part II of Schedule 2 to that Act, or
(b)the landlord has applied, or could apply, to the Secretary of State or the Housing Corporation for approval for the purposes of ground 10A of a redevelopment scheme including the dwelling, or part of it, the landlord may make to the person giving up possession a payment corresponding to any home loss payment which they would be required to make to him if an order for possession had been made on either of those grounds.”.
10Management agreements
For section 27 of the Housing Act 1985 (agreements with housing co-operatives), and the heading preceding it, substitute— “Management agreements. " Management agreements
27(1)A local housing authority may, with the approval of the Secretary of State, agree that another person shall exercise as agent of the authority in relation to—
(a)such of the authority's houses as are specified in the agreement, and
(b)any other land so specified which is held for a related purpose, such of the authority's management functions as are so specified.
(2)In this Act " management agreement" and " manager ", in relation to such an agreement, mean an agreement under this section and the person with whom the agreement is made.
(3)A management agreement shall set out the terms on which the authority's functions are exercisable by the manager.
(4)A management agreement may, where the manager is a body or association, provide that the manager's functions under the agreement may be performed by a committee or sub-committee, or by an officer, of the body or association.
(5)The Secretary of State's approval (which may be given unconditionally or subject to conditions) is required both for the terms of the agreement and the identity of the manager.
(6)References in this section to the management functions of a local housing authority in relation to houses or land include—
(a)functions conferred by any statutory provision, and
(b)the powers and duties of the authority as holder of an estate or interest in the houses or land in question. Consultation required before management agreement can be approved.
27A(1)A local housing authority who propose to enter into a management agreement shall serve notice in writing on the tenant of each house to which the proposal relates informing him of—
(a)such details of their proposal as the authority consider appropriate, but including the identity of the person who is to be the manager under the agreement,
(b)the likely consequences of the agreement for the tenant, and
(c)the effect of the provisions of this section, and informing him that he may, within such reasonable period as may be specified in the notice, make representations to the authority.
(2)The authority shall consider any representations made to them within that period and shall serve a further written notice on the tenant informing him—
(a)of any significant changes in their proposal,and
(b)that he may within such period as is specified (which must be at least 28 days after the service of the notice) communicate to the Secretary of State his objection to the proposal, and informing him of the effect of subsection (5) (approval to be withheld if majority of tenants are opposed).
(3)The Secretary of State shall not entertain an application for approval of a management agreement unless the local housing authority certify that the requirements of subsections (1) and (2) as to consultation have been complied with; and the certificate shall be accompanied by a copy of the notices given by the authority in accordance with those subsections.
(4)The Secretary of State may require the authority to carry out such further consultation with their tenants, and to give him such information as to the results of that consultation, as he may direct.
(5)The Secretary of State shall not give his approval if it appears to him that a majority of the tenants of the houses to which the agreement relates do not wish the proposal to proceed; but this does not affect his general discretion to withhold his approval on grounds relating to whether the proposal has the support of the tenants or on any other ground.
(6)In making his decision the Secretary of State may have regard to any information available to him ; and the local housing authority shall give him such information as to the representations made to them by tenants and others, and other relevant matters, as he may require.
(7)A management agreement made with the approval of the Secretary of State is not invalidated by a failure on his part or that of the local housing authority to comply with the requirements of this section.
(8)In the case of secure tenants the provisions of this section apply in place of the provisions of section 105 (consultation on matters of housing management) in relation to the making of a management agreement. Agreements with housing cooperatives under superseded provisions.
27B(1)In this section " housing co-operative " means a society, company or body of trustees with which a housing co-operative agreement was made, that is to say
(a)an agreement to which paragraph 9 of Schedule 1 to the Housing Rents and Subsidies Act 1975 or Schedule 20 to the Housing Act 1980 applied or,
(b)an agreement made under section 27 above before the commencement of section 10 of the Housing and Planning Act 1986 (which substituted the present section 27).
(2)A housing co-operative agreement made with a local housing authority which is in force immediately before the commencement of section 10 of the Housing and Planning Act 1986 has effect as if made under the present section 27, so that, in particular, any terms of the agreement providing for the letting of land to the housing co-operative no longer have effect except in relation to lettings made before commencement.
(3)A housing co-operative agreement made with a new town corporation or the Development Board for Rural Wales which is in force immediately before the commencement of section 10 of the Housing and Planning Act 1986 remains in force notwithstanding that the present section 27 does not apply to such authorities.
(4)In this Act (except in section 27) the expressions " management agreement" and " manager ", in relation to such an agreement, include a housing co-operative agreement to which subsection (2) or (3) applies and the housing co-operative with whom the agreement is made.”.
11Proposals for co-operative management or ownership
In Part II of the Housing Act 1985, after the provisions inserted by section 10 above insert— “Proposals for co-operative management or ownership Proposals for co-operative management or ownership.
27C(1)If a qualifying tenants' association serves written notice on the local housing authority—
(a)proposing that the authority should enter into a management agreement with the association with respect to houses and other land specified in the notice, or
(b)proposing that the association should acquire from the authority houses and other land specified in the notice at a specified price, the authority shall take the proposal into consideration.
(2)If the authority have not, by the end of the period of six months after service of the notice, accepted the proposal in principle, they shall give the association a written statement of the reasons why they have not done so.
(3)A tenants' association is a qualifying association for the purposes of this section if—
(a)it is a housing association of which at least half the members are tenants of houses specified in the notice,
(b)it has at least 50 such members or is registered under the Industrial and Provident Societies Act 1965, and
(c)at least half the tenants of the specified houses are members of the association.”.
Assured tenancies

12Extension of assured tenancies scheme to cases where works have been carried out
(1)In section 56(1) of the Housing Act 1980 (tenancies which are assured tenancies), for paragraphs (a) and (b) substitute—
“(a)the conditions described in section 56A or 56B are satisfied,
(b)the interest of the landlord has, since the creation of the tenancy, belonged to an approved body, and
(c)the tenancy would, when created, have been a protected tenancy or, as the case may be, a housing association tenancy but for this section.”.
(2)After that section insert— “Conditions for assured tenancy: newly erected buildings.
56AThe first set of conditions referred to in section 56(l)(a) above is that—
(a)the dwelling-house is, or forms part of, a building which was erected (and on which construction work first began) on or after 8th August 1980, and
(b)before the tenant first occupied the dwelling house under the tenancy, no part of it had been occupied by any person as his residence except under an assured tenancy. Conditions for assured tenancy: buildings to which works have been carried out.
56B(1)The second set of conditions referred to in section 56(l)(a) above is that—
(a)qualifying works have been carried out (whether before or after the commencement of this section),
(b)the dwelling-house is (or was) fit for human habitation at the relevant date, and
(c)since the qualifying works were carried out no part of the dwelling-house has been occupied by any person as his residence except under an assured tenancy, and, in the case of the first relevant tenancy, that the person (or persons) to whom the tenancy is granted is not (or do not include) a person who was a secure occupier of the dwelling-house before the works were carried out
(2)Qualifying works means works involving expenditure attributable to the dwelling-house of not less than the prescribed amount which are carried out within the period of two years preceding the relevant date at a time when the premises constituting the dwelling-house at the relevant date either were not a dwelling-house or no part of them was occupied by a person as his residence.
(3)Expenditure is attributable to a dwelling-house if it is incurred on works carried out to the premises constituting the dwelling-house at the relevant date or to other land or buildings let with the dwelling-house under the first relevant tenancy.
(4)Where the dwelling-house is a fiat, there is also attributable to the dwelling-house a proportion of any expenditure incurred on works carried out to the structure, exterior or common parts of, or to common facilities in, the building of which the dwelling-house forms part.
(5)The proportion so attributable shall be taken to be the amount produced by dividing the total amount of such expenditure by the number of units of occupation in the building at the relevant date.
(6)In this section—' flat' means a separate set of premises, whether or not on the same floor, which—
(a)forms part of a building, and
(b)is divided horizontally from some other part of the building;' the first relevant tenancy' means the first tenancy after the carrying out of the qualifying works under which a person is entitled to occupy the dwelling-house as his residence;
' the prescribed amount' means the amount which at the relevant date is prescribed for the purposes of this section by order of the Secretary of State;
' the relevant date' means the date of grant of the first relevant tenancy;
' secure occupier' means a person who, whether alone or jointly with others, occupied or was entitled to occupy the dwelling-house as—
(a)a protected or statutory tenant within the meaning of the Rent Act 1977,
(b)a secure tenant within the meaning of Part IV of the Housing Act 1985, or
(c)a protected occupier or statutory tenant within the meaning of the Rent (Agriculture) Act 1976. Certification of fitness for purposes of s. 56B.
56C(1)An approved body having an interest in a dwelling-house which it proposes to let on an assured tenancy may—
(a)apply in writing to the local housing authority for a certificate that the dwelling-house is fit for human habitation, or
(b)submit to the local housing authority a list of works which it proposes to carry out to the dwelling-house with a request in writing for the authority's opinion whether the dwelling-house would, after the execution of the works, be fit for human habitation; and the authority shall as soon as may be after receiving the application or request, and upon payment of such reasonable fee as they may determine, take the matter into consideration.
(2)If the authority are of opinion that the dwelling-house is fit for human habitation, they shall give the approved body a certificate to that effect.
(3)If the authority are of opinion that the dwelling-house will be fit for human habitation after the execution of the proposed works, they shall inform the approved body that they are of that opinion.
(4)In any other case, the authority shall give the approved body a list of the works which in their opinion are required to make the dwelling-house fit for human habitation.
(5)Where the authority have responded in accordance with subsection (3) or (4) and the works in question have been executed to their satisfaction, they shall, if the approved body applies in writing, and upon payment of such reasonable fee as the authority may determine, give the body a certificate that the dwelling-house is fit for human habitation.
(6)For the purpose of determining whether the condition in section 56B(l)(b) was satisfied in any case (fitness of dwelling-house on relevant date), but not for any other purpose, a certificate given under this section is conclusive evidence that the dwelling-house was fit for human habitation on the date on which the certificate was given.
(7)In this section ' the local housing authority' has the same meaning as in the Housing Act 1985. Fitness for human habitation.
56DIn determining for any of the purposes of section 56B or 56C whether a dwelling-house is, or would be, fit for human habitation, regard shall be had to its condition in respect of the following matters—
repair,
stability,
freedom from damp,
internal arrangement,
natural lighting,
ventilation,
water supply,
drainage and sanitary conveniences,
facilities for the preparation and cooking of food and the disposal of waste water;
and the dwelling-house shall be deemed to be unfit only if it is, or would be, so far defective in one or more of those matters as to be not reasonably suitable for occupation in that condition.”.
(3)In section 57 of the Housing Act 1980 (effect of interest of landlord ceasing to belong to approved body), in subsections (1) and (2) for " section 56(3)(a) " substitute
“section 56(1)(b)”.
13Other amendments relating to assured tenancies
(1)In section 19(5) of the Rent Act 1977 (contracts which are not restricted contracts), after paragraph (e) insert— ".or
(f)it creates an assured tenancy within the meaning of section 56 of the Housing Act 1980 ;".
(2)In Schedule 15 to the Rent Act 1977 (grounds for possession), in Part IV (definition of suitable alternative accommodation), renumber paragraph 4 as sub-paragraph (1) of that paragraph and after it insert—
“(2)For the purposes of sub-paragraph (1)(b) the terms of a tenancy shall not be treated as affording the required security by reason only of the fact that the tenancy is an assured tenancy within the meaning of section 56 of the Housing Act 1980.”.
(3)In Schedule 4 to the Rent (Agriculture) Act 1976 (grounds for possession), in Case I (alternative accommodation not provided or arranged by housing authority), renumber paragraph 2 as sub-paragraph (1) of that paragraph and after it insert—
“(2)For the purposes of sub-paragraph (1)(b) the terms of a tenancy shall not be treated as affording the required security by reason only of the fact that the tenancy is an assured tenancy within the meaning of section 56 of the Housing Act 1980.”.
(4)In section 37 of the Landlord and Tenant Act 1954 (compensation where an order for new tenancy precluded on certain grounds), in subsection (2) (computation of compensation) as set out in paragraph 7 of Schedule 5 to the Housing Act 1980 (application of 1954 Act to assured tenancies), after " be " insert
“the product of the appropriate multiplier and”. The above amendment applies notwithstanding that the application to the court under section 24 of the Landlord and Tenant Act 1954 was made before the commencement of this section, unless the application has been finally disposed of within the meaning of section 64(2) of that Act before commencement.
(5)In section 58 of the Housing Act 1980 (application of Landlord and Tenant Act 1954 to assured tenancies), at the end add—
“(3)In sections 56 to 58 of this Act ' tenancy' has the same meaning as in the Landlord and Tenant Act 1954 and references to the granting of a tenancy shall be construed accordingly.”.
(7)In Schedule 5 to the Housing Act 1980 (application of Landlord and Tenant Act 1954 to assured tenancies), for paragraph 8 (modification of provisions relating to contracting out) substitute—
“8Section 38 applies as if the following provisions were omitted—
(a)in subsection (1), the words " (except as provided by subsection (4) of this section)”;
(b)in subsection (2), the words from the beginning to the end of paragraph (b);
(c)subsections (3) and (4)." The above amendment, so far as it relates to section 38(4) of the Landlord and Tenant Act 1954, does not apply to an agreement both approved by the court under that provision and entered into before the commencement of this section.
Miscellaneous

14Housing the homeless
(1)The Housing Act 1985 shall be amended in accordance with the following provisions.
(2)In section 58 (definition of homelessness) after subsection (2) there shall be inserted the following subsections—
“(2A)A person shall not be treated as having accommodation unless it is accommodation which it would be reasonable for him to continue to occupy.
(2B)Regard may be had, in determining whether it would be reasonable for a person to continue to occupy accommodation, to the general circumstances prevailing in relation to housing in the district of the local housing authority to whom he has applied for accommodation or for assistance in obtaining accommodation.”.
(3)For section 69(1) (provisions supplementary to ss. 63, 65 and 68) there shall be substituted the following subsection—
“(1)A local housing authority may perform any duty under section 65 or 68 (duties to persons found to be homeless) to secure that accommodation becomes available for the occupation of a person—
(a)by making available suitable accommodation held by them under Part II (provision of housing) or any enactment, or
(b)by securing that he obtains suitable accommodation from some other person, or
(c)by giving him such advice and assistance as will secure that he obtains suitable accommodation from some other person, and in determining whether accommodation is suitable they shall have regard to Part IX (slum clearance), X (overcrowding) and XI (houses in multiple occupation) of this Act.”.
15Grants for improvement or repair of common parts
Part XV of the Housing Act 1985 (grants for works of improvement, repair and conversion) is amended in accordance with Schedule 3 so as to provide for a new form of grant towards the costs of works required for the improvement or repair of the common parts of a building containing one or more flats.
16Housing management; financial assistance, etc.
In Part XIII of the Housing Act 1985 (general financial provisions), after section 429 insert— “Housing management: financial assistance etc.
429A(1)The Secretary of State may, with the consent of the Treasury, give financial assistance—
(a)to persons managing public sector or former public sector housing, and
(b)to persons seeking to facilitate or encourage improvements in, or providing services in connection with, the management of such housing; and may, with the like consent, make payments otherwise than by way of financial assistance in pursuance of arrangements made with any such person.
(2)For this purpose—
(a)" public sector housing" means housing accommodation in which an authority or body within section 80 (the landlord condition for secure tenancies) has an interest by virtue of which it receives a rack-rent, or would do so if the premises were let at a rack-rent; and
(b)" former public sector housing" means housing accommodation in which such an authority, or a predecessor of such an authority or an authority abolished by the Local Government Act 1985 formerly had such an interest.
(3)The Secretary of State may, with the consent of the Treasury, give financial assistance—
(a)to persons providing educational or training courses in housing management,
(b)to persons providing services for those providing such courses, and
(c)to persons providing financial or other assistance for those attending such courses ; and may, with the like consent, make payments otherwise than by way of financial assistance in pursuance of arrangements made with any such person.
(4)Financial assistance given by the Secretary of State under subsection (1) or (3) may be given in any form, and may in particular be given by way of grants, loans or guarantees or by incurring expenditure for the benefit of the person assisted; but the Secretary of State shall not in giving such assistance purchase loan or share capital in a company.
(5)Financial assistance may be given and other payments made on such terms as the Secretary of State, with the consent of the Treasury, considers appropriate; and the terms may, in particular, include provision as to the circumstances in which the assistance or other payment must be repaid or otherwise made good to the Secretary of State and the manner in which that is to be done.
(6)A person receiving financial assistance under this section shall comply with the terms on which it is given and compliance may be enforced by the Secretary of State.”.
17Matters to be taken into account in determining fair rent
(1)Section 70 of the Rent Act 1977 (determination of fair rent) is amended as follows.
(2)In subsection (1) (matters to be taken into account), omit the word
“and”before paragraph (b) and after that paragraph insert—
(c)any premium, or sum in the nature of a premium, which has been or may be lawfully required or received on the grant, renewal, continuance or assignment of the tenancy.”.
(3)After subsection (4) insert—
“(4A)In this section " premium " has the same meaning as in Part IX of this Act, and " sum in the nature of a premium " means—
(a)any such loan as is mentioned in section 119 or 120 of this Act,
(b)any such excess over the reasonable price of furniture as is mentioned in section 123 of this Act, and
(c)any such advance payment of rent as is mentioned in section 126 of this Act.”.
(4)The above amendments apply to every decision made by a rent officer or rent assessment committee after the commencement of this section, notwithstanding that the application was made before commencement or, in the case of a decision of a rent assessment committee, that the rent officer's decision was made before commencement.
18Further provisions with respect to shared ownership leases
The provisions of Schedule 4 have effect to exclude certain shared ownership leases from the operation of the provisions of—
(a)the Rent Act 1977 and the Rent (Agriculture) Act 1976, and
(b)Part I of the Leasehold Reform Act 1967 (right of long leaseholder to enfranchisement or extension of lease).
19Extension of permitted objects of registered housing associations
In section 4 of the Housing Associations Act 1985 (eligibility for registration), in subsection (3) (permissible additional purposes or objects of association), after paragraph (d) insert—
“(dd)providing services of any description for owners or occupiers of houses in arranging or carrying out works of maintenance, repair or improvement, or encouraging or facilitating the carrying out of such works;”.
20Disposal of dwellings in new towns
(1)Part III of the New Towns Act 1981 (transfer of new town housing to district councils), is amended as follows. (2) After section 57 insert— “Savings for other powers of disposal.
57AThe provisions of this Part as to the transfer of dwellings in a new town to a district council shall not be construed as restricting—
(a)the power of the Commission under section 36 above,
(b)the power of a development corporation under section 64 below, or
(c)the power of the Development Board for Rural Wales under section 4 of the Development of Rural Wales Act 1976, to dispose of such dwellings to any person.”.
(3)The following provisions (which relate to the initiation of consultations with a view to the transfer of new town housing to a district council) are repealed—section 43(3) and (4),
section 49(b) and (c).
21Effect of resolutions relating to housing action area or general improvement area
(1)In Part VIII of the Housing Act 1985 (area improvement) before section 260, under the heading "Supplementary provisions " insert— “Effect of resolutions relating to housing action area or general improvement area.
259A(1)A resolution of a local housing authority passed after the commencement of this section—
(a)declaring an area to be a housing action area, excluding land from a housing action area or declaring that an area shall cease to be a housing action area, or
(b)declaring an area to be a general improvement area, excluding land from a general improvement area or declaring that an area shall cease to be a general improvement area, has effect, subject to subsection (2), from the day on which the resolution is passed.
(2)A resolution declaring an area to be a general improvement area may be expressed to have effect from a future date, not later than four weeks after the passing of the resolution, on which the whole or part of that area will cease to be, or be included in, a housing action area. Effect of certain resolutions passed before commencement of S.259A.
259B(1)Where before the commencement of section 259A a local housing authority passed a resolution of any of the descriptions mentioned in the section expressed to have effect from a date after that on which it was passed—
(a)anything done before the commencement of this section in reliance on the view that the resolution was invalid shall have effect as if the resolution had not been passed, but
(b)otherwise, the resolution shall be taken for all purposes, both before and after the commencement of this section, to have been validly passed and to have had effect from the date on which it was expressed to have had effect; subject to the following provisions.
(2)A person shall not be proceeded against in respect of anything done or omitted before the commencement of this section which would not have been an offence if the resolution had not been passed.
(3)Where the resolution declared a housing action area or general improvement area and, before the commencement of this section, the local housing authority passed a further resolution making the like declaration in relation to the whole or part of the area to which the first resolution then related—
(a)both resolutions are effective, notwithstanding that they relate in whole or in part to the same area;
(b)the area covered by both resolutions is a housing action area or general improvement area by virtue of the joint effect of the two resolutions, and in the case of a housing action area shall continue to be such an area (subject to the provisions of this Part) until the end of the period of five years beginning with the date on which the second resolution was passed ;
(c)it is immaterial whether steps taken before the commencement of this section were taken in reliance on the first resolution or the second, but steps taken in reliance on the first shall not be proceeded with to the extent that they have been superseded by, or are inconsistent with, steps taken in reliance on the second ; and
(d)the areas declared by the two resolutions may be treated as one for the purposes of section 245(3) or 259(3) (limit on aggregate expenditure qualifying for contributions by Secretary of State).
(4)The provisions of subsection (3) do not affect the powers of the Secretary of State under section 241(2) (a) and (b) (power to overrule declaration of housing action area or exclude land from area) and, so far as they relate to the duration of a housing action area, have effect subject to section 241(4) (effect of Secretary of State's decision in such a case).”.
(2)In consequence of the above amendment, Part VIII of the Housing Act 1985 is further amended as follows—
(a)in section 239(4) (duration of housing action area), omit
“beginning with the date on which the resolution is passed”;
(b)in section 240(1) (steps to be taken after declaration of housing action area) omit
“passing a resolution”;
(c)in section 242(2) (incorporation into housing action area of land comprised in general improvement area), for " the resolution is passed declaring such an area" substitute
“the area is declared”;
(d)in section 250(1) (exclusion of land from, or termination of, housing action area), omit
“on the date on which the resolution is passed”;
(e)in section 257 (duty to publish information) for " have declared " substitute
“have passed a resolution declaring”
and for " assistance available" substitute
“assistance which is or will be available”;
(f)in section 258(1)(6) (resolution terminating general improvement area), for " an area to be no longer " substitute
“that an area shall cease to be”;
(g)in section 258(2) (effect of resolution excluding land from or terminating general improvement area) for " the date on which the resolution takes effect" substitute
“the date on which the exclusion or cessation takes effect”
and for " the exclusion or cessation" substitute
“the resolution”.
22Agreements with certain housing bodies exempt from Consumer Credit Act 1974
(1)Section 16 of the Consumer Credit Act 1974 (exempt agreements) is amended as follows.
(2)In subsection (1) (which enables orders to be made exempting agreements with certain descriptions of creditor), after paragraph (f) insert—
“(ff)a body corporate named or specifically referred to in an order made under—section 156(4), 444(1) or 447(2)(o) of the Housing Act 1985,
section 2 of the Home Purchase Assistance and Housing Corporation Guarantee Act 1978 or section 31 of the Tenants' Rights, &c. (Scotland) Act 1980, or
Article 154(l)(a) or 156AA of the Housing (Northern Ireland) Order 1981 or Article 10(6A) of the Housing (Northern Ireland) Order 1983 ; or ; and in subsection (3) (requirements as to consultation), in paragraph (d) (consultation with responsible Minister), for " or (1) " substitute
“, (f) or (f)”.”
(3)After subsection (6) insert—
“(6A)This Act does not regulate a consumer credit agreement where the creditor is a housing authority and the agreement is secured by a land mortgage of a dwelling.
(6B)In subsection (6A) " housing authority " means—
(a)as regards England and Wales, an authority or body within section 80(1) of the Housing Act 1985 (the landlord condition for secure tenancies), other than a housing association or a housing trust which is a charity;
(b)as regards Scotland, a development corporation established under an order made, or having effect as if made under the New Towns (Scotland) Act 1968, the Scottish Special Housing Association or the Housing Corporation ;
(c)as regards Northern Ireland, the Northern Ireland Housing Executive.”.
(4)The above amendments apply to agreements made after the commencement of this section.
23Determination of price for leasehold enfranchisement
(1)In section 9(1 A) of the Leasehold Reform Act 1967 (determination of price payable for enfranchisement of higher value houses), in paragraph (a) (assumption that vendor is selling subject to existing tenancy) after " no right to acquire the freehold " insert
“or an extended lease and, where the tenancy has been extended under this Part of this Act, that the tenancy will terminate on the original term date.”.
(2)In section 23(5) of the Leasehold Reform Act 1967 (provisions as to tenancy granted in satisfaction of tenant's rights under Part I), in paragraph (b) (provisions which apply as if the tenancy were granted by way of extension) at the beginning insert
“section 9(1) and (1A) above,”.
(3)The above amendments do not apply—
(a)where the price for enfranchisement has been determined, by agreement or otherwise, before the commencement of this section ; or
(b)where the notice under section 8 of the Leasehold Reform Act 1967 (notice of desire to have the freehold) was given before the passing of this Act; or
(c)where notice under section 14 of that Act (notice of desire to have extended lease) was given before 5th March 1986.
24Minor and consequential amendments; repeals
(1)The enactments relating to housing are amended in accordance with Part I of Schedule 5 with respect to the following matters—
(a)the effect of a covenant for repayment of discount given on the disposal of a dwelling-house;
(b)the acquistion by an authority or body within section 80 of the Housing Act 1985 (the landlord condition for secure tenancies) of a dwelling-house subject to a statutory tenancy;
(c)the contents of a landlord's notice under section 125 of that Act (notice of terms of exercise of right to buy);
(d)the steps to be taken where there is a change of land lord in the course of exercise of the right to buy ;
(e)the deferment of completion in pursuance of the right to buy;
(f)the maximum penalty for voting in contravention of section 618(3) of the Housing Act 1985 (member of Common Council or committee voting on matter in which he is interested);
(g)the withholding of consent to the assignment by way of exchange of a secure tenancy of a dwelling-house managed by a certain description of housing association ;
(h)grants for affording tax relief to housing associations;
(i)the recovery of service charges in respect of the cost of grant-aided works;
(j)miscellaneous corrections.
(2)Part II of Schedule 5 contains amendments consequential on the provisions of this Part.
(3)The enactments specified in Part I of Schedule 12 are repealed to the extent specified.
Part II
Simplified Planning Zones

England and Wales

25Simplified planning zones in England and Wales
(1)In Part III of the Town and Country Planning Act 1971 (general planning control), after section 24 insert— “Simplified planning zone schemes Simplified planning zones.
24A(1)A simplified planning zone is an area in respect of which a simplified planning zone scheme is in force.
(2)The adoption or approval of a simplified planning zone scheme has effect to grant in relation to the zone, or any part of it specified in the scheme, planning permission for development specified in the scheme or for development of any class so specified.
(3)Planning permission under a simplified planning zone scheme may be unconditional or subject to such conditions, limitations or exceptions as may be specified in the scheme.
(4)Every local planning authority—
(a)shall consider, as soon as practicable after this section comes into operation, the question for which part or parts of their area a simplified planning zone scheme is desirable, and shall thereafter keep that question under review; and
(b)shall prepare a scheme for any such part for which they decide, as a result of their original consideration or of any such review, that it is desirable to do so.
(5)The provisions of Schedule 8A to this Act have effect with respect to the making and alteration of simplified planning zone schemes and other related matters.
(6)The functions of local planning authorities under the provisions of this Act relating to simplified planning zone schemes shall be performed in non-metropolitan counties by the district planning authorities. Simplified planning zone schemes: conditions and limitations on planning permission.
24B(1)The conditions and limitations on planning permission which may be specified in a simplified planning zone scheme may include—
(a)conditions or limitations in respect of all development permitted by the scheme or in respect of particular descriptions of development so permitted, and
(b)conditions or limitations requiring the consent, agreement or approval of the local planning authority in relation to particular descriptions of permitted development; and different conditions or limitations may be specified for different cases or classes of case.
(2)Nothing in a simplified planning zone scheme shall affect the right of any person—
(a)to do anything not amounting to development, or
(b)to carry out development for which planning permission is not required or for which permission has been granted otherwise than by the scheme ; and no limitation or restriction subject to which permission has been granted otherwise than under the scheme shall affect the right of any person to carry out development for which permission has been granted under the scheme. Duration of simplified planning zone scheme.
24C(1)A simplified planning zone scheme shall take effect on the date of its adoption or approval and shall cease to have effect at the end of the period of ten years beginning with that date.
(2)Upon the scheme's ceasing to have effect planning permission under the scheme shall also cease to have effect except in a case where the development authorised by it has been begun.
(3)The provisions of section 44(2) to (6) of this Act (which provide for the termination of planning permission if the completion of development is unreasonably delayed) apply to planning permission under a simplified planning zone scheme where development has been begun but not completed by the time the area ceased to be a simplified planning zone.
(4)The provisions of section 43(1) to (3) of this Act apply in determining for the purposes of this section when development shall be taken to be begun. Alteration of simplified planning zone scheme.
24D(1)The adoption or approval of alterations to a simplified planning zone scheme has effect as follows.
(2)The adoption or approval of alterations providing for the inclusion of land in the simplified planning zone has effect to grant in relation to that land or such part of it as is specified in the scheme planning permission for development so specified or of any class so specified.
(3)The adoption or approval of alterations providing for the grant of planning permission has effect to grant such permission in relation to the simplified planning zone, or such part of it as is specified in the scheme, for development so specified or development of any class so specified.
(4)The adoption or approval of alterations providing for the withdrawal or relaxation of conditions, limitations or restrictions to which planning permission under the scheme is subject has effect to with draw or relax the conditions, limitations or restrictions forthwith.
(5)The adoption or approval of alterations providing for—
(a)the exclusion of land from the simplified planning zone,
(b)the withdrawal of planning permission, or
(c)the imposition of new or more stringent conditions, limitations or restrictions to which planning permission under the scheme is subject, has effect to withdraw permission, or to impose the conditions, limitations or restrictions, with effect from the end of the period of twelve months beginning with the date of the adoption or approval.
(6)The adoption or approval of alterations to a scheme does not affect planning permission under the scheme in any case where the development authorised by it has been begun. The provisions of section 43(1) to (3) of this Act apply in determining for the purposes of this subsection when development shall be taken to be begun. Exclusion of certain descriptions of land or development.
24E(1)The following descriptions of land may not be included in a simplified planning zone—
(a)land in a National Park ;
(b)land in a conservation area ;
(c)land in an area designated under section 87 of the National Parks and Access to the Countryside Act 1949 as an area of outstanding natural beauty;
(d)land identified in the development plan for the district as part of a green belt;
(e)land in respect of which a notification or order is in force under section 28 or 29 of the Wildlife and Countryside Act 1981 (areas of special scientific interest).
(2)Where land included in a simplified planning zone becomes land of such a description, subsection (1) does not have effect to exclude it from the zone.
(3)The Secretary of State may by order provide that no simplified planning zone scheme shall have effect to grant planning permission—
(a)in relation to an area of land specified in the order or to areas of land of a description so specified, or
(b)for development of a description specified in the order.
(4)An order under subsection (3) has effect to withdraw such planning permission under a simplified planning zone scheme already in force with effect from the date on which the order comes into force, except in a case where the development authorised by the permission has been begun. The provisions of section 43(1) to (3) of this Act apply in determining for the purposes of this subsection when development shall be taken to be begun.”.
(2)After Schedule 8 to the Town and Country Planning Act 1971 insert as Schedule 8A the Schedule set out in Part I of Schedule 6 to this Act which contains provision with respect to the making and alteration of simplified planning zone schemes and other related matters.
(3)The Town and Country Planning Act 1971 also has effect subject to the consequential amendments specified in Part II of Schedule 6 to this Act.
Scotland

26Simplified planning zones in Scotland
(1)In Part III of the Town and Country Planning (Scotland) Act 1972 (general planning control), after section 21 insert— “Simplified planning zone schemes Simplified planning zones. 21 A.—
(1)A simplified planning zone is an area in respect of which a simplified planning zone scheme is in force.
(2)The adoption or approval of a simplified planning zone scheme has effect to grant in relation to the zone, or any part of it specified in the scheme, planning permission for development specified in the scheme or for development of any class so specified.
(3)Planning permission under a simplified planning zone scheme may be unconditional or subject to such conditions, limitations or exceptions as may be specified in the scheme.
(4)Every planning authority—
(a)shall consider, as soon as practicable after this section comes into operation, the question for which part or parts of their district a simplified planning zone scheme is desirable, and shall thereafter keep that question under review; and
(b)shall prepare a scheme for any such part for which they decide, as a result of their original consideration or of any such review, that it is desirable to do so.
(5)The provisions of Schedule 6A to this Act have effect with respect to the making and alteration of simplified planning zone schemes and other related matters. Simplified planning zone schemes: conditions and limitations on planning permission.
21B(1)The conditions and limitations on planning permission which may be specified in a simplified planning zone scheme may include—
(a)conditions or limitations in respect of all development permitted by the scheme or in respect of particular descriptions of development so permitted, and
(b)conditions or limitations requiring the consent, agreement or approval of the planning authority in relation to particular descriptions of permitted development; and different conditions or limitations may be specified for different cases or classes of case.
(2)Nothing in a simplified planning zone scheme shall affect the right of any person—
(a)to do anything not amounting to development, or
(b)to carry out development for which planning permission is not required or for which permission has been granted otherwise than by the scheme; and no limitation or restriction subject to which permission has been granted otherwise than under the scheme shall affect the right of any person to carry out development for which permission has been granted under the scheme. Duration of simplified planning zone scheme.
21C(1)A simplified planning zone scheme shall take effect on the date of its adoption or approval and shall cease to have effect at the end of the period of ten years beginning with that date.
(2)Upon the scheme's ceasing to have effect planning permission under the scheme shall also cease to have effect except in a case where the development authorised by it has been begun.
(3)The provisions of section 41(2) to (6) of this Act (which provide for the termination of planning permission if the completion of development is unreasonably delayed) apply to planning permission under a simplified planning zone scheme where development has been begun but not completed by the time the area ceases to be a simplified planning zone.
(4)The provisions of section 40(1) to (3) of this Act apply in determining for the purposes of this section when development shall be taken to be begun. Alteration of simplified planning scheme.
21D(1)The adoption or approval of alterations to a simplified planning zone scheme has effect as follows.
(2)The adoption or approval of alterations providing for the inclusion of land in the simplified planning zone has effect to grant in relation to that land or such part of it as is specified in the scheme planning permission for development so specified or of any class so specified.
(3)The adoption or approval of alterations providing for the grant of planning permission has effect to grant such permission in relation to the simplified planning zone, or such part of it as is specified in the scheme, for development so specified or development of any class so specified.
(4)The adoption or approval of alterations providing for the withdrawal or relaxation of conditions, limitations or restrictions to which planning permission under the scheme is subject has effect to withdraw or relax the conditions, limitations or restrictions forthwith.
(5)The adoption or approval of alterations providing for—
(a)the exclusion of land from the simplified planning zone,
(b)the withdrawal of planning permission, or
(c)the imposition of new or more stringent conditions, limitations or restrictions to which planning permission under the scheme is subject, has effect to withdraw permission, or to impose the conditions, limitations or restrictions, with effect from the end of the period of twelve months beginning with the date of the adoption or approval.
(6)The adoption or approval of alterations to a scheme does not affect planning permission under the scheme in any case where the development authorised by it has been begun. The provisions of section 40(1) to (3) of this Act apply in determining for the purposes of this subsection when development shall be taken to be begun. Exclusion of certain descriptions of land or development.
21E(1)The following descriptions of land may not be included in a simplified planning zone—
(a)land in a conservation area ;
(b)land in a National Scenic Area ;
(c)land identified in the development plan for the area as part of a green belt;
(d)land in respect of which a notification or order is in force under section 28 or 29 of the Wildlife and Countryside Act 1981 (areas of special scientific interest).
(2)Where land included in a simplified planning zone becomes land of such a description, subsection (1) does not have effect to exclude it from the zone.
(3)The Secretary of State may by order provide that no simplified planning zone scheme shall have effect to grant planning permission—
(a)in relation to an area of land specified in the order or to areas of land of a description so specified, or
(b)for development of a description specified in the order.
(4)An order under subsection (3) has effect to withdraw such planning permission under a simplified planning zone scheme already in force with effect from the date on which the order comes into force, except in a case where the development authorised by the permission has been begun.The provisions of section 40(1) to (3) of this Act apply in determining for the purposes of this subsection when development shall be taken to be begun.”.
(2)After Schedule 6 to the Town and Country Planning (Scotland) Act 1972 insert as Schedule 6A the Schedule set out in Part III of Schedule 6 to this Act which contains provision with respect to the making and alteration of simplified planning zone schemes and other related matters.
(3)The Town and Country Planning (Scotland) Act 1972 also has effect subject to the consequential amendments specified in Part IV of Schedule 6 to this Act.
Part III
Financial Assistance for Urban Regeneration

27Power to give assistance
(1)The Secretary of State may, with the consent of the Treasury, give financial assistance to any person in respect of qualifying expenditure incurred in connection with activities contributing to the regeneration of an urban area by bringing land and buildings into effective use, creating an attractive environment, providing employment for people who live in the area or ensuring that housing and social facilities are available to encourage people to live and work in the area.
(2)Expenditure incurred in connection with any of the following qualifies for assistance—
(a)the acquisition of land or buildings;
(b)the reclamation, improvement or refurbishment of land or buildings;
(c)the development or redevelopment of land, including the conversion or demolition of existing buildings ;
(d)the equipment or fitting out of buildings or land ;
(e)the provision of means of access, services or other facilities for buildings or land ;
(f)environmental improvements.
28Forms of assistance
(1)Financial assistance under section 27 may be given in any form.
(2)Assistance may, in particular, be given by way of—
(a)grants,
(b)loans,
(c)guarantees, or
(d)incurring expenditure for the benefit of the person assisted.
(3)The Secretary of State shall not in giving financial assistance under section 27 purchase loan or share capital in a company.
29Terms on which assistance is given
(1)Financial assistance under section 27 may be given on such terms as the Secretary of State, with the consent of the Treasury, considers appropriate.
(2)The terms may, in particular, include provision as to—
(a)circumstances in which the assistance must be repaid, or otherwise made good, to the Secretary of State, and the manner in which that is to be done; or
(b)circumstances in which the Secretary of State is entitled to recover the proceeds or part of the proceeds of any disposal of land or buildings in respect of which assistance was provided.
(3)The person receiving assistance shall comply with the terms on which it is given and compliance may be enforced by the Secretary of State.
Part IV
Hazardous Substances

England and Wales

30Hazardous substances authorities
The following sections shall be inserted after section 1 of the Town and Country Planning Act 1971— “Hazardous substances authorities— general.
1A(1)Subject to subsections (2) to (4) below, in this Act " hazardous substances authority ", in relation to any land other than land to which section IB below applies, means the council of the district or London borough in which it is situated.
(2)Subject to subsection (3) below, the county council are the hazardous substances authority if the land is in a non-metropolitan county and—
(a)is situated in a National Park ;
(b)is used for the winning and working of minerals (including their extraction from a mineral-working deposit); or
(c)is situated in England and used for the disposal of refuse or waste materials.
(3)A joint planning board or special planning board for a National Park are the hazardous substances authority for the Park.
(4)An urban development corporation are the hazardous substances authority for their area, if they are the local planning authority in relation to all kinds of development. Hazardous substances authorities— statutory undertakers.
1B(1)In this Act "hazardous substances authority ", in relation to land to which this section applies, means the appropriate Minister.
(2)This section applies—
(a)to operational land of statutory undertakers ;
(b)to land in which statutory undertakers hold, or propose to acquire, an interest with a view to the land being used as operational land.
(3)For the purposes of this section any land to which this subsection applies but which is not operational land of statutory undertakers authorised to carry on a harbour shall be treated as if it were such operational land.
(4)Subsection (3) above applies—
(a)to a wharf; and
(b)to harbour land, as defined in the Harbours Act 1964.
(5)Any question whether subsection (3) above applies to land shall be determined by the Secretary of State and the Minister who is the appropriate Minister in relation to operational land of statutory undertakers who are authorised to carry on harbour undertakings.”.
31Hazardous substances
The following shall be inserted after section 58A of the Town and Country Planning Act 1971— “Requirement of hazardous substances consent. " Hazardous substances
58B(1)Subject to the provisions of this Part of this Act, the presence of a hazardous substance on, over or under land requires the consent of the hazardous substances authority (in this Act referred to as "hazardous substances consent") unless the aggregate quantity of the substance—
(a)on, under or over the land ;
(b)on, under or over other land which is within 500 metres of it and controlled by the same person; or
(c)in or on a structure controlled by the same person any part of which is within 500 metres of it, is less than the controlled quantity.
(2)The temporary presence of a hazardous substance while it is being transported from one place to another is not to be taken into account unless it is unloaded.
(3)The Secretary of State-
(a)shall by regulations specify—
(i)the substances that are hazardous substances for the purposes of this Act;
(ii)the quantity which is to be the controlled quantity of any such substance ;
(b)may by regulations provide that hazardous substances consent is not required or is only required—
(i)in relation to land of prescribed descriptions;
(ii)by reason of the presence of hazardous substances in prescribed circumstances ;
(c)may by regulations provide that, except in such circumstances as may be prescribed, all hazardous substances falling within a group specified in the regulations are to be treated as a single substance for the purposes of this Act.
(4)Regulations which—
(a)are made by virtue of sub-paragraph (i) of subsection (3)(a) above ; or
(b)are made by virtue of sub-paragraph (ii) of that paragraph and reduce the controlled quantity of a substance, may make such transitional provision as appears to the Secretary of State to be appropriate.
(5)The power to make such transitional provision includes, without prejudice to its generality, power to apply section 23 of the Housing and Planning Act 1986 subject to such modifications as appear to the Secretary of State to be appropriate.
(6)Regulations under this section may make different provisions for different cases or descriptions of cases.
(7)Bodies corporate which are inter-connected for the purposes of the Fair Trading Act 1973 are to be treated as being one person for the purposes of this section and sections 58C to 58K and 101B below. Applications for hazardous substances consent.
58C(1)Provision may be made by regulations with respect to—
(a)the form and manner in which applications for hazardous substances consent are to be made;
(b)the particulars which they are to contain and the evidence by which they are to be verified;
(c)the manner in which they are to be advertised ; and
(d)the time within which they are to be dealt with.
(2)Regulations may provide that an application for hazardous substances consent, or an appeal against the refusal of such an application or against the imposition of a condition on such a consent, shall not be entertained unless it is accompanied by a certificate in the prescribed form and corresponding to one or other of those described in section 27(1)(d) to id) of this Act; and any such regulations may—
(a)include requirements corresponding to sections 27(2) and (4) and 29(3) of this Act;and
(b)make provision as to who is to be treated as the owner of land for the purposes of any provision of the regulations.
(3)If any person issues a certificate which purports to comply with the requirements of regulations made by virtue of subsection (2) above and which contains a statement which he knows to be false or misleading in a material particular, or recklessly issues a certificate which purports to comply with those requirements and which contains a statement which is false or misleading in a material particular, he shall be guilty of an offence and liable on summary conviction to a fine of an amount not exceeding level 3 on the standard scale.
(4)Regulations—
(a)may require an applicant for hazardous substances consent or the hazardous substances authority or both to give publicity to an application for hazardous substances consent in such manner as may be prescribed ;
(b)may require hazardous substances authorities to conduct appropriate consultations before determining applications for hazardous substances consent;
(c)may provide for the manner in which such a consultation is to be carried out and the time within which—
(i)such a consultation;
(ii)any stage in such a consultation, is to be completed;
(d)may require hazardous substances authorities to determine applications for hazardous substances consent within such time as may be prescribed;
(e)may require hazardous substances authorities to give prescribed persons or bodies prescribed information about applications for hazardous substances consent, including information as to the manner in which such applications have been dealt with.
(5)In subsection (4) above " appropriate consultations " means—
(a)consultations—
(i)in the case of a hazardous substances authority other than the appropriate Minister, with the Health and Safety Executive ; and
(ii)in the case of the appropriate Minister, with the Health and Safety Commission ; and
(b)consultations with such persons or bodies as may be prescribed.
(6)Regulations under this section may make different provision for different cases or descriptions of cases. Determination of applications for hazardous substances consent.
58D(1)Subject to the following provisions of this Act, where an application is made to a hazardous substances authority for hazardous substances consent, that authority, in dealing with the application, shall have regard to any material considerations, and—
(a)may grant hazardous substances consent, either unconditionally or subject to such conditions as they think fit; or
(b)may refuse hazardous substances consent.
(2)Without prejudice to the generality of subsection (1) above, in dealing with an application the authority shall have regard—
(a)to any current or contemplated use of the land to which the application relates;
(b)to the way in which land in the vicinity is being used or is likely to be used;
(c)to any planning permission that has been granted for development of land in the vicinity;
(d)to the provisions of the development plan; and
(e)to any advice which the Health and Safety Executive or Health and Safety Commission have given following consultations in pursuance of regulations under section 58C(4) above.
(3)If an application relates to more than one hazardous substance, the authority may make different determinations in relation to each.
(4)It shall be the duty of a hazardous substances authority, when granting hazardous substances consent, to include in that consent—
(a)a description of the land to which the consent relates ;
(b)a description of the hazardous substance or substances to which it relates; and
(c)in respect of each hazardous substance to which it relates, a statement of the maximum quantity permitted by the consent to be present at any one time and of all conditions relating to that substance subject to which the consent is granted.
(5)Without prejudice to the generality of subsection (1) above, a hazardous substances authority may grant hazardous substances consent subject to conditions with respect to any of the following—
(a)how and where any hazardous substance to which the consent relates is to be kept or used;
(b)times between which any such substance may be present;
(c)the permanent removal of any such substance—
(i)on or before a date specified in the consent; or
(ii)before the end of a period specified in it and commencing on the date on which it is granted ;
(d)the consent being conditional on the commencement or partial or complete execution of development on the land which is authorised by a specified planning permission ; but an authority who are a hazardous substances authority by virtue of section 1A above may only grant consent subject to conditions as to how a hazardous substance is to be kept or used if the conditions are conditions to which the Health and Safety Executive have advised the authority that any consent they might grant should be subject. References to Secretary of State and appeals.
58E(1)Subject to subsections (2) and (3) below, sections 35 to 37 of this Act shall have effect in relation to applications for hazardous substances consent and to decisions on such applications as though they were applications for planning permission.
(2)In the application of sections 35 to 37 of this Act to hazardous substances consent—
(a)references to the local planning authority shall be construed as references to the hazardous substances authority;
(b)section 35(4) and section 36(5) and (7) shall be omitted;
(c)the words " and in such manner as may be prescribed " shall be substituted for the words in section 36(2) following
“time”;
(d)in section 37, the words " by the development order" shall be omitted from both places where they occur.
(3)Subsections (1) and (2) above do not have effect in relation to applications for hazardous substances consent relating to land to which section IB of this Act applies or to decisions on such applications. Deemed hazardous substances consent by virtue of authorisation of government: department.
58F(1)Where
(a)the authorisation of a government department is required by virtue of an enactment in respect of development to be carried out by a local authority, or by statutory undertakers not being a local authority ; and
(b)the development would involve the presence of a hazardous substance in circumstances requiring hazardous substances consent, the department may, on granting that authorisation, also direct that hazardous substances consent shall be deemed to be granted subject to such conditions (if any) as may be specified in the directions.
(2)The department shall consult the Health and Safety Commission before issuing any such directions.
(3)The provisions of this Act (except Parts VII and XII) shall apply in relation to any hazardous substances consent deemed to be granted by virtue of directions under this section as if it had been granted by the Secretary of State on an application referred to him under section 35 of this Act, as applied by section 58E of this Act.
(4)The reference in subsection (1) above to the authorisation of a government department is to be construed in accordance with section 40(3) of this Act. Grants of hazardous substances consent without compliance with conditions previously attached.
58G(1)This section applies to an application for hazardous substances consent without a condition subject to which a previous hazardous substances consent was granted.
(2)On such an application the hazardous substances authority shall consider only the question of the conditions subject to which hazardous substances consent should be granted, and—
(a)if they determine that hazardous substances consent should be granted subject to conditions differing from those subject to which the previous consent was granted, or that it should be granted unconditionally, they shall grant hazardous substances consent accordingly; and
(b)if they determine that hazardous substances consent should be granted subject to the same conditions as those subject to which the previous consent was granted, they shall refuse the application.
(3)Where
(a)hazardous substances consent has been granted or is deemed to have been granted for the presence on, over or under land of more than one hazardous substance; and
(b)an application under this section does not relate to all the substances, the hazardous substances authority shall only have regard to any condition relating to a substance to which the application does not relate to the extent that it has implications for a substance to which the application does relate.
(4)Where
(a)more than one hazardous substances consent has been granted or is deemed to have been granted in respect of the same land; and
(b)an application under this section does not relate to all the consents, the hazardous substances authority shall only have regard to any consent to which the application does not relate to the extent that it has implications for consent to which the application does relate.
(5)Regulations may make provision in relation to applications under this section corresponding to any provision that may be made by regulations under section 58C above in relation to applications for hazardous substances consent. Power to revoke or modify hazardous substances consent.
58H(1)If it appears to the hazardous substances authority that—
(a)there has been a material change of use of land to which a hazardous substances consent relates; or
(b)planning permission has been granted for development the carrying out of which would involve a material change of use of such land and the development to which the permission relates has been commenced, they may by order—
(i)if the consent relates only to one substance, revoke it;
(ii)if it relates to more than one, revoke it or revoke it so far as it relates to a specified substance.
(2)The hazardous substances authority may by order—
(a)revoke a hazardous substances consent which relates to only one substance if it appears to them that that substance has not for at least 5 years been present on, under or over the land to which the consent relates in a quantity equal to or exceeding the controlled quantity ; and
(b)revoke a hazardous substances consent which relates to a number of substances if it appears to them that none of those substances has for at least 5 years been so present.
(3)The hazardous substances authority may by order revoke a hazardous substances consent or modify it to such extent as they consider expedient if it appears to them, having regard to any material consideration, that it is expedient to revoke or modify it.
(4)An order under this section shall specify the grounds on which it is made.
(5)An order under this section, other than an order relating to land to which section IB of this Act applies, shall not take effect unless it is confirmed by the Secretary of State, and the Secretary of State may confirm any such order submitted to him either without modification or subject to such modification as he considers expedient.
(6)Where a hazardous substances authority submit an order under this section to the Secretary of State for his confirmation under this section, the authority shall serve notice of the order—
(a)on any person who is an owner of the whole or any part of the land to which the order relates;
(b)on any person other than an owner who appears to them to be in control of the whole or any part of that land ;
(c)on any other person who in their opinion will be affected by the order; and if within the period specified in that behalf in the notice (not being less than 28 days from the service thereof) any person on whom the notice is served so requires, the Secretary of State, before confirming the order, shall afford to that person and to the hazardous substances authority an opportunity of appearing before, and being heard by, a person appointed by the Secretary of State for that purpose.
(7)Where an order under this section has been confirmed by the Secretary of State, the hazardous substances authority shall serve a copy of the order on every person who was entitled to be served with notice under subsection (6) above.
(8)Section 170 of this Act shall have effect where a hazardous substances consent is revoked or modified by an order made in the exercise of the power conferred by subsection (3) above as it has effect where an order is made under section 51 of this Act, but as if any reference in it to the local planning authority were a reference to the hazardous substances authority. Provisions as to effect of hazardous substances consent and change of control of land.
58J(1)Without prejudice to the provisions of this Part of this Act, any hazardous substances consent shall (except in so far as it otherwise provides) enure for the benefit of the land to which it relates and of all persons for the time being interested in the land.
(2)A hazardous substances consent is revoked if there is a change in the person in control of part of the land to which it relates, unless an application for the continuation of the consent has previously been made to the hazardous substances authority.
(3)Regulations may make provision in relation to applications under subsection (2) above corresponding to any provision that may be made by regulations under section 58C of this Act in relation to applications for hazardous substances consent.
(4)When such an application is made, the authority, having regard to any material consideration—
(a)may modify the consent in any way they consider appropriate; or
(b)may revoke it.
(5)Without prejudice to the generality of subsection (4) above, in dealing with an application the authority shall have regard—
(a)to the matters to which a hazardous substances authority are required to have regard by section 58D(2)(a) to (d) above; and
(b)to any advice which the Health and Safety Executive or Health and Safety Commission have given following consultations in pursuance of regulations under subsection (3) above.
(6)If an application relates to more than one consent, the authority may make different determinations in relation to each.
(7)If a consent relates to more than one hazardous substance, the authority may make different determinations in relation to each.
(8)It shall be the duty of a hazardous substances authority, when continuing hazardous substances consent, to attach to the consent one of the following—
(a)a statement that it is unchanged in relation to the matters included in it by virtue of section 58D(4) above;
(b)a statement of any change in respect of those matters.
(9)The modifications which a hazardous substances authority may make by virtue of subsection (4) (a) above include, without prejudice to the generality of that paragraph, the making of the consent subject to conditions with respect to any of the matters mentioned in section 58D(5) above.
(10)Subject to subsection (11) below, sections 35 to 37 of this Act shall have effect in relation to applications under subsection (2) above and to decisions on such applications as though they were applications for planning permission.
(11)In the application of sections 35 to 37 of this Act by virtue of subsection (10) above—
(a)references to the local planning authority shall be construed as references to the hazardous substances authority;
(b)section 35(4) and section 36(5) and (7) shall be omitted;
(c)the words " and in such manner as may be prescribed" shall be substituted for the words in section 36(2) following
“time”;
(d)in section 37—
(i)the words " by the development order" shall be omitted from the first place where they occur; and
(ii)the words " the application shall be deemed to have been granted " shall be substituted for the words following paragraph (b).
(12)Where the authority modify or revoke the consent, they shall pay to the person in control of the whole of the land before the change compensation in respect of any loss or damage sustained by him and directly attributable to the modification or revocation. Offences.
58K(1)Subject to this Part of this Act, if there is a contravention of hazardous substances control, the appropriate person shall be guilty of an offence.
(2)There is a contravention of hazardous substances control—
(a)if a quantity of a hazardous substance equal to or exceeding the controlled quantity is or has been present on, under or over land and either—
(i)there is no hazardous substances consent for the presence of the substance ; or
(ii)there is hazardous substances consent for its presence but the quantity present exceeds the maximum quantity permitted by the consent;
(b)if there is or has been a failure to comply with a condition subject to which a hazardous substances consent was granted.
(3)In subsection (1) above " the appropriate person " means—
(a)in relation to a contravention falling within paragraph (a) of subsection (2) above—
(i)any person knowingly causing the substance to be present on, over or under the land;
(ii)any person allowing it to be so present; and
(b)in relation to a contravention falling within paragraph (a) or (b) of that subsection, the person in control of the land.
(4)A person guilty of an offence under this section shall be liable—
(a)on summary conviction, to a fine not exceeding the statutory maximum; or
(b)on conviction on indictment, to a fine, and if the contravention is continued after the conviction he shall be guilty of a further offence and liable on summary conviction to a fine not exceeding £200 for each day on which it continues, or on conviction on indictment to a fine.
(5)In any proceedings for an offence under this section it shall be a defence for the accused to prove—
(a)that he took all reasonable precautions and exercised all due diligence to avoid commission of the offence, or
(b)that commission of the offence could be avoided only by the taking of action amounting to a breach of a statutory duty.
(6)In any proceedings for an offence consisting of a contravention falling within subsection (2)(a) above, it shall be a defence for the accused to prove that at the time of the alleged commission of the offence he did not know, and had no reason to believe.—
(a)if the case falls within paragraph (a)(i)—
(i)that the substance was present; or
(ii)that it was present in a quantity equal to or exceeding the controlled quantity;
(b)if the case falls within paragraph (a)(ii), that the substance was present in a quantity exceeding the maximum quantity permitted by the consent.
(7)In any proceedings for an offence consisting of a contravention falling within subsection (2)(b) above, it shall be a defence for the accused to prove that he did not know, and had no reason to believe, that there was a failure to comply with a condition subject to which hazardous substances consent had been granted. Emergencies.
58L(1)If it appears to the Secretary of State—
(a)either—
(i)that the community or part of it is being or is likely to be deprived of an essential service or commodity : or
(ii)that there is or is likely to be a shortage of such a service or commodity affecting the community or part of it; and
(b)that the presence of a hazardous substance on, over or under land specified in the direction in circumstances such that hazardous substances consent would be required, is necessary for the effective provision of that service or commodity, he may direct that, subject to such conditions or exceptions as he thinks fit, the presence of the substance on, over or under the land is not to constitute a contravention of hazardous substances control so long as the direction remains in force.
(2)A direction under this section—
(a)may be withdrawn at any time ;
(b)shall in any case cease to have effect at the end of the period of three months beginning with the day on which it was given, but without prejudice to the Secretary of State's power to give a further direction.
(3)Subject to subsection (4) below, the Secretary of State shall send a copy of any such direction to the authority which are the hazardous substances authority in relation to the land.
(4)Where the land is land to which section IB of this Act applies, the Secretary of State shall send the copy to the authority which would be the hazardous substances authority in relation to the land but for that section. Registers, etc.
58M(1)Every authority which is a hazardous substances authority by virtue of section 1A of this Act shall keep, in such manner as may be prescribed, a register containing such information as may be prescribed with respect—
(a)to applications for hazardous substances consent—
(i)made to that authority ; or
(ii)made to the appropriate Minister with respect to land in relation to which, but for section IB of this Act, that authority would be the hazardous substances authority; and including information as to the manner in which such applications have been dealt with;
(b)to hazardous substances consent deemed to be granted under section 23 of the Housing and Planning Act 1986 with respect to land in relation to which that authority is, or but for section IB of this Act would be, the hazardous substances authority ;
(c)to revocations or modifications of hazardous substances consent granted with respect to such land; and
(d)to directions under section 58L of this Act sent to the authority by the Secretary of State.
(2)Where with respect to any land the appropriate Minister exercises any of the functions of a hazardous substances authority, he shall send to the authority which but for section IB of this Act would be the hazardous substances authority in relation to the land any such information as appears to him to be required by them for the purposes of maintaining a register under this section.
(3)Every register kept under this section shall be available for inspection by the public at all reasonable hours. Health and safety requirements.
58N(1)Nothing in
(a)any hazardous substances consent granted or deemed to be granted under—
(i)the preceding provisions of this Act; or
(ii)section 34 of the Housing and Planning Act 1986; or
(b)any hazardous substances contravention notice issued under section 10IB of this Act, shall require or allow anything to be done in contravention of any of the relevant statutory provisions or any prohibition notice or improvement notice served under or by virtue of any of those provisions; and to the extent that such a consent or notice purports to require or allow any such thing to be done, it shall be void.
(2)Where it appears to a hazardous substances authority who have granted, or are deemed to have granted, a hazardous substances consent or who have issued a hazardous substances contravention notice that the consent or notice or part of it is rendered void by subsection (1) above, the authority shall, as soon as is reasonably practicable, consult the appropriate body with regard to the matter.
(3)If the appropriate body advise the authority that the consent or notice is rendered wholly void, the authority shall revoke it.
(4)If they advise that part of the consent or notice is rendered void, the authority shall so modify it as to render it wholly operative.
(5)In this section—
" the appropriate body " means—
(a)in relation to a hazardous substances authority other than the appropriate Minister, the Health and Safety Executive; and
(b)in relation to the appropriate Minister, the Health and Safety Commission; and " relevant statutory provisions ", " improvement notice " and " prohibition notice " have the same meanings as in Part I of the Health and Safety at Work etc. Act 1974.".”
32Hazardous substances contravention notices
The following shall be inserted after section 101A of the Town and Country Planning Act 1971— “Hazardous substances Power to issue hazardous substances contravention notice.
101B(1)Subject to subsection (2) below, where it appears to the hazardous substances authority that there is or has been a contravention of hazardous substances control, they may issue a hazardous substances contravention notice if they consider it expedient to do so having regard to any material consideration.
(2)A hazardous substances authority shall net issue a hazardous substances contravention notice where it appears to them that a contravention of hazardous substances control can be avoided only by the taking of action amounting to a breach of a statutory duty.
(3)In this Act " hazardous substances contravention notice " means a notice—
(a)specifying an alleged contravention of hazardous substances control; and
(b)requiring such steps as may be specified in the notice to be taken to remedy the contravention.
(4)A copy of a hazardous substances contravention notice shall be served—
(a)on the owner of the land to which it relates ;
(b)on any person other than the owner who appears to the hazardous substances authority to be in control of that land ; and
(c)on such other persons as may be prescribed.
(5)A hazardous substances contravention notice shall also specify—
(a)a date not less than 28 days from the date of service of copies of the notice as the date on which it is to take effect;
(b)in respect of each of the steps required to be taken to remedy the contravention of hazardous substances control, the period from the notice taking effect within which the step is to be taken.
(6)Where a hazardous substances authority issue a hazardous substances contravention notice the steps required by the notice may, without prejudice to the generality of subsection (3) (b) above, if the authority think it expedient, include a requirement that the hazardous substance be removed from the land.
(7)Where a notice includes such a requirement, it may also contain a direction that at the end of such period as may be specified in the notice any hazardous substances consent for the presence of the substance shall cease to have effect or, if it relates to more than one substance, shall cease to have effect so far as it relates to the substance which is required to be removed.
(8)The hazardous substances authority may withdraw a hazardous substances contravention notice (without prejudice to their power to issue another) at any time before it takes effect.
(9)If they do so, they shall forthwith give notice of the withdrawal to every person who was served with a copy of the notice.
(10)The Secretary of State may by regulations—
(a)specify matters which are to be included in hazardous substances contravention notices, in addition to those which are required to be included in them by this section;
(b)provide—
(i)for appeals to him against hazardous substances contravention notices;
(ii)for the persons by whom, grounds upon which and time within which such an appeal may be brought;
(iii)for the procedure to be followed on such appeals;
(iv)for the directions that may be given on such an appeal;
(v)for the application to such appeals, subject to such modifications as the regulations may specify, of any of the provisions of sections 88 to 88B, 243 and 246 of this Act;
(c)direct that any of the provisions of sections 89 to 93 of this Act shall have effect in relation to hazardous substances contravention notices subject to such modifications as he may specify in the regulations;
(d)make such other provision as he considers necessary or expedient in relation to hazardous substances contravention notices.
(11)If any person appeals against a hazardous substances contravention notice, the notice shall be of no effect pending the final determination or the withdrawal of the appeal.
(12)Regulations under this section may make different provision for different cases or descriptions of cases.”.
33Consequential amendments
The enactments mentioned in Part I of Schedule 7 to this Act shall have effect with the amendments there specified, being amendments consequential on the provisions of this Part of this Act.
34Transitional
(1)Until the end of the transitional period—
(a)no offence is committed under section 58K of the Town and Country Planning Act 1971; and
(b)no hazardous substances contravention notice may be issued, in relation to a hazardous substance which is on, under or over any land, if the substance was present on, under or over the land at any time within the establishment period and—
(i)in a case in which at the commencement date notification in respect of the substance was required by any of the Notification Regulations, both the conditions specified in subsection (2) below were satisfied ; and
(ii)in a case in which at that date such notification was not so required, the condition specified in paragraph (b) of that subsection is satisfied.
(2)The conditions mentioned in subsection (1) above are—
(a)that notification required by the Notification Regulations was given before the commencement date ; and
(b)that the substance has not been present during the transitional period in a quantity greater in aggregate than the established quantity.
(3)Where a hazardous substance was present on, under or over any land at any time within the establishment period, hazardous substances consent may be claimed in respect of its presence.
(4)A claim shall be made in the prescribed form before the end of the transitional period and shall contain the prescribed information as to the presence of the substance during the establishment period and as to how and where it was kept and used immediately before the commencement date.
(5)Subject to subsections (6) to (8) below, the hazardous substances authority shall be deemed to have granted any hazardous substances consent which is claimed under subsection (3) above.
(6)If at the commencement date notification in respect of the substance was required by regulation 3 or 5 of the Notification Regulations, hazardous substances consent is only to be deemed to be granted under this section if notification in respect of the substance was given before that date in accordance with those regulations.
(7)If at the commencement date such notification was not so required, hazardous substances consent is only to be deemed to be granted under this section if an aggregate quantity of the substance not less than the controlled quantity was present at any one time within the establishment period.
(8)If it appears to the hazardous substances authority that a claim for hazardous substances consent does not comply with subsection (4) above, it shall be their duty, before the end of the period of two weeks from their receipt of the claim.—
(a)to notify the claimant that in their opinion the claim is invalid; and
(b)to give him their reasons for that opinion.
(9)Hazardous substances consent which is deemed to be granted under this section is subject to the conditions that—
(a)the maximum aggregate quantity of the substance that may be present—
(i)on, under or over the land to which the claim relates ;
(ii)on, under or over other land which is within 500 metres of it and controlled by the same person ; or
(iii)in or on a structure controlled by the same person any part of which is within 500 metres of it, at any one time shall not exceed the established quantity ; and
(b)the substance shall be kept and used in the place and manner in which information supplied in pursuance of regulations made by virtue of subsection (4) above shows that it was kept and used immediately before the commencement date, and
(c)none of the substance shall be kept or used in a container greater in capacity than the container, or the largest of the containers, in which the substance was kept or used immediately before the commencement date.
(10)In this section—
" commencement date " means the date on which this Part of this Act comes into force ;
" the establishment period" means the period of 12 months immediately preceding the commencement date;
" established quantity " means, in relation to any land—
(a)where before the commencement date there has been a notification in respect of a substance in accordance with any of the Notification Regulations— (i) the quantity notified or last notified before the commencement date ; or
(i)a quantity equal to twice the quantity which was so notified or last notified before the start of the establishment period, whichever is the greater ;
(b)where a notification was not required before that date by any of those regulations, a quantity exceeding by 50 per cent, the maximum quantity which was present on, under or over the land at any one time within the establishment period;
" Notification Regulations " means the Notification of Installations Handling Hazardous Substances Regulations 1982;
" the transitional period " means the period of 6 months beginning with the commencement date ; and other expressions have the same meanings as in the Town and Country Planning Act 1971.
Scotland

35Hazardous substances-Scotland
The following shall be inserted after section 56AA of the Town and Country Planning (Scotland) Act 1972— “Hazardous substances Hazardous substances.
56A(1)Subject to subsection (2) of this section and to section 56B below, it shall be the duty of the planning authority to control hazardous substances in accordance with the provisions of this Act.
(2)An urban development corporation shall control hazardous substances in their area if they are the planning authority in relation to all kinds of development. Hazardous substances-statutory undertakers.
56B(1)The appropriate Minister shall be the planning authority in respect of hazardous substances in relation to land to which this section applies.
(2)This section applies—
(a)to operational land of statutory undertakers;
(b)to land in which statutory undertakers hold, or propose to acquire, an interest with a view to the land being used as operational land.
(3)For the purposes of this section any land to which this subsection applies but which is not operational land of statutory undertakers authorised to carry on a harbour shall be treated as if it were such operational land.
(4)Subsection (3) above applies—
(a)to a wharf ; and
(b)to harbour land, as defined in the Harbours Act 1964.
(5)Any question whether subsection (3) above applies to land shall be determined by the Secretary of State and the Minister who is the appropriate Minister in relation to operational land of statutory undertakers who are authorised to carry on harbour undertakings. Requirement of hazardous substances consent.
56C(1)Subject to the provisions of this Part of this Act, the presence of a hazardous substance on, over or under land requires the consent of the planning authority (in this Act referred to as " hazardous substances consent") unless the aggregate quantity of the substance—
(a)on, under or over the land ;
(b)on, under or over other land which is within 500 metres of it and controlled by the same person; or
(c)in or on a structure controlled by the same person any part of which is within 500 metres of it, is less than the controlled quantity.
(2)The temporary presence of a hazardous substance while it is being transported from one place to another is not to be taken into account unless it is unloaded.
(3)The Secretary of State
(a)shall by regulations specify—
(i)the substances that are hazardous substances for the purposes of this Act;
(ii)the quantity which is to be the controlled quantity of any such substance;
(b)may by regulations provide that hazardous substances consent is not required or is only required—
(i)in relation to land of prescribed descriptions;
(ii)by reason of the presence of hazardous substances in prescribed circumstances ;
(c)may by regulations provide that, except in such circumstances as may be prescribed, all hazardous substances falling within a group specified in the regulations are to be treated as a single substance for the purposes of this Act.
(4)Regulations which—
(a)are made by virtue of sub-paragraph (i) of subsection (3)(a) above ; or
(b)are made by virtue of sub-paragraph (ii) of that paragraph and reduce the controlled quantity of a substance, may make such transitional provision as appears to the Secretary of State to be appropriate.
(5)The power to make such transitional provision includes, without prejudice to its generality, power to apply section 38 of the Housing and Planning Act 1986 subject to such modifications as appear to the Secretary of State to be appropriate.
(6)Regulations under this section may make different provision for different cases or descriptions of cases.
(7)Bodies corporate which are inter-connected for the purposes of the Fair Trading Act 1973 are to be treated as being one person for the purposes of this section and sections 56D to 56L and 97B below. Applications forhazardous substances consent.
56D(1)Provision may be made by regulations with respect to—
(a)the form and manner in which applications for hazardous substances consent are to be made:
(b)the particulars which they are to contain and the evidence by which they are to be verified;
(c)the manner in which they are to be advertised ; and
(d)the time within which they are to be dealt with.
(2)Regulations may provide that an application for hazardous substances consent, or an appeal against the refusal of such an application or against the imposition of a condition on such a consent, shall not be entertained unless it is accompanied by a certificate in the prescribed form and corresponding to one or other of those described in section 24(l)(a) to id) of this Act and any such regulations may—
(a)include requirements corresponding to those mentioned in sections 23(1), 24(2) and (4) and 26(3) of this Act; and
(b)make provision as to who is to be treated as the owner of land for the purposes of any provision of the regulations.
(3)If any person issues a certificate which purports to comply with the requirements of regulations made by virtue of subsection (2) above and which contains a statement which he knows to be false or misleading in a material particular, or recklessly issues a certificate which purports to comply with those requirements and which contains a statement which is false or misleading in a material particular, he shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.
(4)Regulations—
(a)may require an applicant for hazardous substances consent or the planning authority or both to give publicity to an application for hazardous substances consent in such manner as may be prescribed;
(b)may require the planning authority to conduct appropriate consultations before determining applications for hazardous substances consent;
(c)may provide for the manner in which such a consultation is to be carried out and the time within which—
(i)such a consultation ;
(ii)any stage in such a consultation, is to be completed ;
(d)may require the planning authority to determine applications for hazardous substances consent within such time as may be prescribed;
(e)may require the planning authority to give prescribed persons or bodies prescribed information about applications for hazardous substances consent including information as to the manner in which such applications have been dealt with.
(5)In subsection (4) above " appropriate consultations " means—
(a)consultations—
(i)in the case of a planning authority other than the appropriate Minister, with the Health and Safety Executive ; and
(ii)in the case of the appropriate Minister, with the Health and Safety Commission ; and
(b)consultations with such persons or bodies as may be prescribed.
(6)Regulations under this section may make different provision for different cases or descriptions of cases. Determination of applications for hazardous substances consent.
56E(1)Subject to the following provisions of this Act, where an application is made to a planning authority for hazardous substances consent, that authority, in dealing with the application, shall have regard to any material considerations, and—
(a)may grant hazardous substances consent, either unconditionally or subject to such conditions as they think fit; or
(b)may refuse hazardous substances consent.
(2)Without prejudice to the generality of subsection (1) above, in dealing with an application the authority shall have regard—
(a)to any current or contemplated use of the land to which the application relates;
(b)to the way in which land in the vicinity is being used or is likely to be used ;
(c)to any planning permission that has been granted for development of land in the vicinity;
(d)to the provisions of the development plan; and
(e)to any advice which the Health and Safety Executive or Health and Safety Commission have given following consultations in pursuance of regulations under section 56D(4) above.
(3)If an application relates to more than one hazardous substance, the authority may make different determinations in relation to each.
(4)It shall be the duty of a planning authority, when granting hazardous substances consent, to include in that consent—
(a)a description of the land to which the consent relates;
(b)a description of the hazardous substance or substances to which it relates ; and
(c)in respect of each hazardous substance to which it relates, a statement of the maximum amount permitted by the consent to be present at any one time and of all conditions relating to that substance subject to which the consent is granted.
(5)Without prejudice to the generality of subsection (1) above, a planning authority may grant hazardous substances consent subject to conditions with respect to any of the following—
(a)how and where any hazardous substance to which the consent relates is to be kept or used;
(b)times between which any such substance may be present;
(c)the permanent removal of any such substance—
(i)on or before a date specified in the consent; or
(ii)before the end of a period specified in it and commencing on the date on which it is granted;
(d)the consent being conditional on the commencement or partial or complete execution of development on the land which is authorised by a specified planning permission, but a planning authority other than the appropriate Minister may only grant consent subject to conditions as to how a hazardous substance is to be kept or used if the conditions are conditions to which the Health and Safety Executive have advised the authority that any consent they might grant should be subject. References to regional planning authority and Secretary of State and appeals.
56F(1)Subject to subsections (2) and (3) below, sections 32 to 34 of this Act and section 179 (reference of applications to regional planning authority) of the Local Government (Scotland) Act 1973 shall have effect in relation to applications for hazardous substances consent and to decisions on such applications as though they were applications for planning permission.
(2)In the application of sections 32 to 34 of this Act to hazardous substances consent—
(a)section 32(4) and section 33(5) and (7) shall be omitted;
(b)the words " and in such manner as may be prescribed" shall be substituted for the words in section 33(2) following
“time”;
(c)in section 34, the words "by the development order" shall be omitted from both places where they occur.
(3)Subsections (1) and (2) above do not have effect in relation to applications for hazardous substances consent relating to land to which section 56B of this Act applies or to decisions on such applications. Deemed hazardous substances consent by virtue of authorisation of government department.
56G(1)Where
(a)the authorisation of a government department is required by virtue of an enactment in respect of development to be carried out by a local authority, or by statutory undertakers not being a local authority; and
(b)the development would involve the presence of a hazardous substance in circumstances requiring hazardous substances consent, the department may, on granting that authorisation, also direct that hazardous substances consent for that development shall be deemed to be granted subject to such conditions (if any) as may be specified in the directions.
(2)The department shall consult the Health and Safety Commission before issuing any such directions.
(3)The provisions of this Act (except Parts VII and XII) shall apply in relation to any hazardous substances consent deemed to be granted by virtue of directions under this section as if it had been granted by the Secretary of State on an application referred to him under section 32 of this Act, as applied by section 56F of this Act.
(4)The reference in subsection (1) above to the authorisation of a government department is to be construed in accordance with section 37(3) of this Act. Grants of hazardous substances consent without compliance with conditions previously attached.
56H(1)This section applies to an application for hazardous substances consent without a condition subject to which a previous hazardous substances consent was granted or is deemed to have been granted.
(2)On such an application the planning authority shall consider only the question of the conditions subject to which hazardous substances consent should be granted, and—
(a)if they determine that hazardous substances consent should be granted subject to conditions differing from those subject to which the previous consent was granted, or that it should be granted unconditionally, they shall grant hazardous substances consent accordingly; and
(b)if they determine that hazardous substances consent should be granted subject to the same conditions as those subject to which the previous consent was granted, they shall refuse the application.
(3)Where
(a)hazardous substances consent has been granted or is deemed to have been granted for the presence on, over or under land of more than one hazardous substance; and
(b)an application under this section does not relate to all the substances, the planning authority shall only have regard to any condition relating to a substance to which the application does not relate to the extent that it has implications for a substance to which the application does relate.
(4)Where
(a)more than one hazardous substances consent has been granted or is deemed to have been granted in respect of the same land ; and
(b)an application under this section does not relate to all the consents, the planning authority shall only have regard to any consent to which the application does not relate to the extent that it has implications for a consent to which the application does relate.
(5)Regulations may make provision in relation to applications under this section corresponding to any provision that may be made by regulations under section 56D of this Act in relation to applications for hazardous substances consent. Power to revoke or modify hazardous substance consent.
56J(1)If it appears to the planning authority that—
(a)there has been a material change of use of land to which a hazardous substances consent relates; or
(b)planning permission has been granted for development the carrying out of which would involve a material change of use of such land and the development to which the permission relates has been commenced, they may by order—
(i)if the consent relates only to one substance, revoke it;
(ii)if it relates to more than one, revoke it or revoke it so far as it relates to a specified substance.
(2)The planning authority may by order—
(a)revoke a hazardous substances consent which relates to only one substance if it appears to them that that substance has not for at least 5 years been present on, under or over the land to which the consent relates in a quantity equal to or exceeding the controlled quantity; and
(b)revoke a hazardous substances consent which relates to a number of substances if it appears to them that none of those substances has for at least 5 years been so present.
(3)The planning authority may by order revoke a hazardous substances consent or modify it to such extent as they consider expedient if it appears to them, having regard to any material consideration, that it is expedient to revoke or modify it.
(4)An order under this section shall specify the grounds on which it is being made.
(5)An order under this section, other than an order relating to land to which section 56B of this Act applies, shall not take effect unless it is confirmed by the Secretary of State, and the Secretary of State may confirm any such order submitted to him either without modification or subject to such modification as he considers expedient.
(6)Where a planning authority submit an order under this section to the Secretary of State for his confirmation under this section, the authority shall serve notice of the order on—
(a)any person who is an owner, occupier or lessee of the whole or any part of the land to which the order relates ; and
(b)any other person who in their opinion will be affected by the order; and if within the period specified in that behalf in the notice (not being less than 28 days from the service thereof) any person on whom the notice is served so requires, the Secretary of State, before confirming the order, shall afford to that person and to the planning authority an opportunity of appearing before, and being heard by, a person appointed by the Secretary of State for that purpose.
(7)Where an order under this section has been confirmed by the Secretary of State, the planning authority shall serve a copy of the order on every person who was entitled to be served with notice under subsection (6) of this section.
(8)Section 159 of this Act shall have effect where a hazardous substances consent is revoked or modified by an order made in the exercise of the power conferred by subsection (3) of this section as it has effect where an order is made under section 49 of this Act. Provisions as to effect of hazardous substances consent and change of control of land.
56K(1)Without prejudice to the provisions of this Part of this Act, any hazardous substances consent shall (except in so far as it otherwise provides) enure for the benefit of the land to which it relates and of all persons for the time being interested in the land.
(2)A hazardous substances consent is revoked if there is a change in the person in control of part of the land to which it relates unless an application for the continuation of the consent has previously been made to the planning authority.
(3)Regulations may make provision in relation to applications under subsection (2) above corresponding to any provision that may be made by regulations under section 56D of this Act in relation to applications for hazardous substances consent.
(4)When such application is made, the authority, having regard to any material consideration—
(a)may modify the consent in any way they consider appropriate; or
(b)may revoke it.
(5)Without prejudice to the generality of subsection (4) above, in dealing with an application the authority shall have regard—
(a)to the matters to which a planning authority are required to have regard by section 56E(2)(a) to (d) above ; and
(b)to any advice which the Health and Safety Executive or Health and Safety Commission have given following consultations in pursuance of regulations under subsection (3) above.
(6)If an application relates to more than one consent, the authority may make different determinations in relation to each.
(7)If a consent relates to more than one hazardous substance, the authority may make different determinations in relation to each.
(8)It shall be the duty of a planning authority, when continuing hazardous substances consent, to attach to the consent one of the following—
(a)a statement that is unchanged in relation to the matters included in it by virtue of section 56E(4) above;
(b)a statement of any change in respect of those matters.
(9)The modifications which a planning authority may make by virtue of subsection (4)(a) above include, without prejudice to the generality of that paragraph, the making of the consent subject to conditions with respect to any of the matters mentioned in section 56E(5) above.
(10)Subject to subsection (11) below, sections 32 to 34 of this Act and section 179 of the Local Government (Scotland) Act 1973 shall have effect in relation to applications under subsection (2) above and to decisions on such applications as though they were applications for planning permission.
(11)In the application of sections 32 to 34 of this Act by virtue of subsection (10) above—
(a)section 32(4) and section 33(5) and (7) shall be omitted;
(b)the words " and in such manner as may be prescribed" shall be substituted for the words in section 33(2) following
“time”;
(c)in section 34—
(i)the words " by the development order" shall be omitted from the first place where they occur; and
(ii)the words " the application shall be deemed to have been granted " shall be substituted for the words following paragraph (b).
(12)Where the authority modify or revoke the consent, they shall pay to the person in control of the whole of the land before the change compensation in respect of any loss or damage sustained by him and directly attributable to the modification or revocation. Offences.
56L(1)Subject to this Part of this Act, if there is a contravention of hazardous substances control, the appropriate person shall be guilty of an offence.
(2)There is a contravention of hazardous substances control—
(a)if a quantity of a hazardous substance equal to or exceeding the controlled quantity is or has been present on, under or over land and either—
(i)there is no hazardous substances consent for the presence of the substance ; or
(ii)there is hazardous substances consent for its presence but the quantity present exceeds the maximum quantity permitted by the consent;
(b)if there is or has been a failure to comply with a condition subject to which a hazardous substances consent was granted.
(3)In subsection (1) above " the appropriate person " means—
(a)in relation to a contravention falling within paragraph (a) of subsection (2) above—
(i)any person knowingly causing the substance to be present on, over or under the land;
(ii)any person allowing it to be so present; and
(b)in relation to a contravention falling within paragraph (a) or (b) of that subsection, the occupier of the land.
(4)A person guilty of an offence under this section shall be liable—
(a)on summary conviction, to a fine not exceeding the statutory maximum ; or
(b)on conviction on indictment, to a fine, and if the contravention is continued after the conviction he shall be guilty of a further offence and liable on summary conviction to a fine not exceeding £200 for each day on which it continues or on conviction on indictment to a fine.
(5)In any proceedings for an offence under this section it shall be a defence for the accused to prove—
(a)that he took all reasonable precautions and exercised all due diligence to avoid commission of the offence ; or
(b)that commission of the offence could be avoided only by the taking of action amounting to a breach of a statutory duty.
(6)In any proceedings for an offence consisting of a contravention falling within subsection (2) (a) above, it shall be a defence for the accused to prove that at the time of the alleged commission of the offence he did not know, and had no reason to believe—
(a)if the case falls within paragraph (a)(i)—
(i)that the substance was present; or
(ii)that it was present in a quantity equal to or exceeding the controlled quantity;
(b)if the case falls within paragraph (a)(ii), that the substance was present in a quantity exceeding the maximum quantity permitted by the consent.
(7)In any proceedings for an offence consisting of a contravention falling within subsection (2)(b) above, it shall be a defence for the accused to prove that he did not know, and had no reason to believe, that he was failing to comply with a condition subject to which hazardous substances consent had been granted. Emergencies.
56M(1)If it appears to the Secretary of State—
(a)either—
(i)that the community or part of it is being or is likely to be deprived of an essential service or commodity; or
(ii)that there is or is likely to be a shortage of such a service or commodity affecting the community or part of it; and
(b)that the presence of a hazardous substance on, over or under land specified in the direction in circumstances such that hazardous substances consent would be required, is necessary for the effective provision of that service or commodity, he may direct that, subject to such conditions or exceptions as he thinks fit, the presence of the substance on, over or under the land is not to constitute a contravention of hazardous substances control so long as the direction remains in force.
(2)A direction under this section—
(a)may be withdrawn at any time;
(b)shall in any case cease to have effect at the end of the period of three months beginning with the day on which it was given, but without prejudice to the Secretary of State's power to give a further direction.
(3)Subject to subsection (4) below, the Secretary of State shall send a copy of any such direction to the planning authority in relation to the land.
(4)Where the land is land to which section 56B of this Act applies, the Secretary of State shall send the copy to the authority which would be the planning authority in relation to that land but for that section. Registers, etc.
56N(1)Every planning authority shall keep, in such manner as may be prescribed, a register containing such information as may be so prescribed with respect—
(a)to applications for hazardous substances consent—
(i)made to that authority, or
(ii)made to the appropriate Minister with respect to land in relation to which, but for section 56B of this Act, that authority would be the planning authority ; and including information as to the manner in which such applications have been dealt with;
(b)to hazardous substances consent deemed to be granted under section 38 of the Housing and Planning Act 1986 with respect to land in relation to which that authority is or but for section 56B of this Act would be, the planning authority ;
(c)to revocations or modifications of hazardous substances consent granted with respect to such land ; and
(d)to directions under section 56M above sent to the authority by the Secretary of State.
(2)Where with respect to any land the appropriate Minister exercises any of the functions of a planning authority for the purposes of hazardous substances control he shall send to the authority which, but for section 56B of this Act, would be the planning authority for those purposes in relation to that land any such information as appears to him to be required by them for the purposes of maintaining a register under this section.
(3)Every register kept under this section shall be available for inspection by the public at all reasonable hours. Health and safety requirements.
56O(1)Nothing in—
(a)any hazardous substances consent granted or deemed to be granted under—
(i)the preceding provisions of this Act; or
(ii)section 38 of the Housing and Planning Act 1986 ; or
(b)any hazardous substances contravention notice issued under section 97B of this Act, shall require or allow anything to be done in contravention of any of the relevant statutory provisions or any prohibition notice or improvement notice served under or by virtue of any of those provisions ; and to the extent that such a consent or notice purports to require or allow any such thing to be done, it shall be void.
(2)Where it appears to a planning authority who have granted or are deemed to have granted a hazardous substances consent or who have issued a hazardous substances contravention notice that the consent or notice or part of it is rendered void by subsection (1) above, the authority shall, as soon as is reasonably practicable, consult the appropriate body with regard to the matter.
(3)If the appropriate body advise the authority that the consent or notice is rendered wholly void, the authority shall revoke it.
(4)If they advise that part of the consent or notice is rendered void, the authority shall so modify it as to render it wholly operative.
(5)In this section—
" the appropriate body " means—
(a)in relation to a planning authority other than the appropriate Minister, the Health and Safety Executive ; and
(b)in relation to the appropriate Minister, the Health and Safety Commission ; and " relevant statutory provisions", " improvement notice " and " prohibition notice " have the same meanings as in Part I of the Health and Safety at Work etc. Act 1974.".”
36Hazardous substances contravention notices
The following shall be inserted after section 97A of the Town and Country Planning (Scotland) Act 1972— “Hazardous substances Power to issue hazardous substances contravention notice.
97B(1)Subject to subsection (2) below, where it appears to the planning authority that there is or has been a contravention of hazardous substances control they may issue a hazardous substances contravention notice if they consider it expedient to do so having regard to any material consideration.
(2)A planning authority shall not issue a hazardous substances contravention notice where it appears to them that a contravention of hazardous substances control can be avoided only by the taking of action amounting to a breach of a statutory duty.
(3)In this Act " hazardous substances contravention notice " means a notice—
(a)specifying an alleged contravention of hazardous substances control; and
(b)requiring such steps as may be specified in the notice to be taken to remedy the contravention.
(4)A copy of a hazardous substances contravention notice shall be served—
(a)on the owner, the lessee and the occupier of the land to which it relates; and
(b)on such other persons as may be prescribed.
(5)A hazardous substances contravention notice shall also specify—
(a)a date not less than 28 days from the date of service of copies of the notice as the date on which it is to take effect;
(b)in respect of each of the steps required to be taken to remedy the contravention of hazardous substances control, the period from the notice taking effect within which the step is to be taken.
(6)Where a planning authority issue a hazardous substances contravention notice the steps required by the notice may, without prejudice to the generality of subsection (3)(b) above, if the authority think it expedient, include a requirement that the hazardous substance be removed from the land.
(7)Where a notice includes such a requirement, it may also contain a direction that at the end of such period as may be specified in the notice any hazardous substances consent for the presence of the substance shall cease to have effect or, if it relates to more than one substance, shall cease to have effect so far as it relates to the substance which is required to be removed.
(8)The planning authority may withdraw a hazardous substances contravention notice (without prejudice to their power to issue another) at any time before it takes effect.
(9)If they do so, they shall forthwith give notice of the withdrawal to every person who was served with a copy of the notice.
(10)The Secretary of State may by regulations—
(a)specify matters which are to be included in hazardous substances contravention notices, in addition to those which are required to be included in them by this section;
(b)provide—
(i)for appeals to him against hazardous substances contravention notices;
(ii)for the persons by whom, grounds upon which and time within which such an appeal may be brought;
(iii)for the procedure to be followed on such appeals;
(iv)for the directions that may be given on such an appeal;
(v)for the application to such appeals, subject to such modifications as the regulations may specify, of any of the provisions of sections 85, 231(3) and 233 of this Act;
(c)direct that any of the provisions of sections 86 to 89A of this Act shall have effect in relation to hazardous substances contravention notices subject to such modifications as he may specify in the regulations ;
(d)make such other provision as he considers necessary or expedient in relation to hazardous substances contravention notices.
(11)If any person appeals against a hazardous substances contravention notice, the notice shall be of no effect pending the final determination or the withdrawal of the appeal.
(12)Regulations under this section may make different provisions for different cases or descriptions of cases.”.
37Consequential amendments
The enactments mentioned in Part II of Schedule 7 to this Act shall have effect with the amendments there specified, being amendments consequential on the provisions of this Part of this Act.
38Transitional (Scotland)
(1)Until the end of the transitional period—
(a)no offence is committed under section 56L of the Town and Country Planning (Scotland) Act 1972; and
(b)no hazardous substances contravention notice may be issued, in relation to a hazardous substance which is on, under or over any land, if the substance was present on, under or over the land at any time within the establishment period and—
(i)in a case in which at the commencement date notification in respect of the substance was required by any of the Notification Regulations, both the conditions specified in subsection (2) below were satisfied ; and
(ii)in a case in which at that date such notification was not so required, the condition specified in paragraph (b) of that subsection is satisfied.
(2)The conditions mentioned in subsection (1) above are—
(a)that notification required by the Notification Regulations was given before the commencement date ; and
(b)that the substance has not been present during the transitional period in a quantity greater in aggregate than the established quantity.
(3)Where a hazardous substance was present on, under or over any land at any time within the establishment period, hazardous substances consent may be claimed in respect of its presence.
(4)A claim shall be made in the prescribed form before the end of the transitional period and shall contain the prescribed information as to the presence of the substance during the establishment period and as to how and where it was kept and used immediately before the commencement date.
(5)Subject to subsections (6) to (8) below, the planning authority shall be deemed to have granted any hazardous substances consent which is claimed under subsection (2) above.
(6)If at the commencement date notification in respect of the substance was required by regulation 3 or 5 of the Notification Regulations, hazardous substances consent is only to be deemed to be granted under this section if notification in respect of the substance was given before that date in accordance with those regulations.
(7)If at the commencement date such notification was not so required, hazardous substances consent is only to be deemed to be granted under this section if an aggregate quantity of the substance not less than the controlled quantity was present at any one time within the establishment period.
(8)If it appears to the planning authority that a claim for hazardous substances consent does not comply with subsection (4) above, it shall be their duty, before the end of the period of two weeks from their receipt of the claim.—
(a)to notify the claimant that in their opinion the claim is invalid; and
(b)to give him their reasons for that opinion.
(9)Hazardous substances consent which is deemed to be granted under this section is subject to the conditions that—
(a)the maximum aggregate quantity of the substance that may be present—
(i)on, under or over the land to which the claim relates ;
(ii)on, under or over other land which is within 500 metres of it and controlled by the same person ; or
(iii)in or on a structure controlled by the same person any part of which is within 500 metres of it, at any one time shall not exceed the established quantity ; and
(b)the substance shall be kept and used in the place and manner in which information supplied in pursuance of regulations made by virtue of subsection (4) above shows that it was kept and used immediately before the commencement date; and
(c)none of the substance shall be kept or used in a vessel or container greater in capacity than the container, or the largest of the containers, in which the substance was kept or used immediately before the commencement date.
(10)In this section—
" commencement date " means the date on which this Part of this Act comes into force;
" the establishment period " means the period of 12 months immediately preceding the commencement date ;
" established quantity " means, in relation to any land—
(a)where before the commencement date there has been a notification in respect of a substance in accordance with any of the Notification Regulations— (i) the quantity notified or last notified before the commencement date ; or
(i)a quantity equal to twice the quantity which was so notified or last notified before the start of the establishment period, whichever is the greater ;
(b)where a notification was not required before that date by any of those regulations, a quantity exceeding by 50 per cent, the maximum quantity which was present on, under or over the land at any one time within the establishment period ;
" Notification Regulations " means the Notification of Installations Handling Hazardous Substances Regulations 1982;
" the transitional period " means the period of 6 months beginning with the commencement date ; and other expressions have the same meaning as in the Town and Country Planning (Scotland) Act 1972.
Part V
Opencast Coal

1Abolition of Secretary of State's power to authorise opencast working,
The following provisions of the Opencast Coal Act 1958 (" the 1958 Act ") shall cease to have effect
(a)sections 1 and 2 (authorisation by Secretary of State of opencast working of coal and associated provisions); and
(b)section 9(2) (buildings on land comprised in a compulsory rights order), but this subsection does not affect a direction given under section 2 of the 1958 Act before the day on which the repeal of that section by paragraph (a) above comes into operation, and any repeal by this Act of an enactment which relates to directions under section 2 of the 1958 Act shall have no effect in relation to directions whose effect is continued by this subsection.
2The repeal of section 2(4) of the 1958 Act shall not prevent the felling of a tree that could not have been felled but for paragraph
(a)of that subsection (which negatived tree preservation orders).
3The 1958 Act shall have effect with the amendments specified in Part I of Schedule 8 to this Act and section 29 of the Acquisition of Land Act 1981 shall have effect with the amendments specified in Part II of that Schedule.
4The enactments specified in Part II of Schedule 12 to this Act (which include enactments already obsolete or unnecessary) are repealed to the extent specified in the third column of that Schedule.
Part VI
Miscellaneous Provisions

England and Wales

40Listed buildings and conservation areas
The enactments relating to listed buildings and conservation areas are amended in accordance with Part I of Schedule 9 with respect to the following matters—
(a)the treatment of free-standing objects and structures within the curtilage of a listed building ;
(b)the scope of the exception for urgent works to a listed building;
(c)the grant of listed building consent subject to the subsequent approval of detail;
(d)applications for the variation or discharge of conditions attached to listed building consent;
(e)the extent of the exemption accorded to ecclesiastical buildings;
(f)dangerous structure orders in respect of listed buildings ;
(g)the power of a local authority, the Secretary of State or the Historic Buildings and Monuments Commission for England to carry out urgent works for the preservation of a building;
(h)the control of demolition in a conservation area ;
(i)the form of an application for listed building consent; and
(j)the powers of the Secretary of State with respect to applications for listed building consent.
41Local plans and unitary development plans
(1)In Part II of the Town and Country Planning Act 1971 (development plans), the sections set out in Part I of Schedule 10 are substituted, except as to Greater London, for sections 10C to 15B (local plans), the main changes being—
(a)to provide for the coordination by county planning authorities, in conjunction with the district planning authorities, of the process of making, altering, repealing or replacing local plans ;
(b)to provide a short procedure for altering a local plan where the issues are not of sufficient importance to warrant the full procedure : and
(c)to enable the Secretary of State to direct a local planning authority to reconsider proposals for making, altering, repealing or replacing a local plan ; and
(d)to omit provisions which are spent in consequence of the approval of structure plans for the whole of England and Wales.
(2)The substituted sections have effect in relation to metropolitan counties until the coming into force of Part I of Schedule 1 to the Local Government Act 1985 (unitary development plans), but subject to the provisions of Part II of that Schedule.
(3)Part I of Schedule 1 to the Local Government Act 1985 (unitary development plans) is amended in accordance with Part II of Schedule 10 to this Act, so as to—
(a)provide a short procedure for altering a unitary development plan where the issues are not of sufficient importance to warrant the full procedure ; and
(b)enable the Secretary of State to direct a local planning authority to reconsider proposals for making, altering or replacing a unitary development plan.
42Recovery of Ministers' costs in connection with inquiries
(1)The following provisions of this section apply where a Minister is authorised under or by virtue of any of the following statutory provisions to recover costs incurred by him in relation to an inquiry—
(a)section 250(4) of the Local Government Act 1972 (general provision as to costs of inquiries),
(b)section 96(5) of the Land Drainage Act 1976 (cost of inquiry under that Act),
(c)section 129(l)(d) of the Road Traffic Regulation Act 1984 (costs of inquiry under that Act),
(d)paragraph 9(2) of Schedule 22 to the Housing Act 1985 (costs of inquiry in connection with acquisition of land for clearance),
(e)any other statutory provision to which this section is applied by order of the Minister.
(2)What may be recovered by the Minister is the entire administrative cost of the inquiry, so that, in particular—
(a)there shall be treated as costs incurred in relation to the inquiry such reasonable sum as the Minister may determine in respect of the general staff costs and overheads of his department, and
(b)there shall be treated as costs incurred by the Minister holding the inquiry any costs incurred in relation to the inquiry by any other Minister or government department and, where appropriate, such reasonable sum as that Minister or department may determine in respect of general staff costs and overheads.
(3)The cost of an inquiry which does not take place may be recovered by the Minister from any person who would have been a party to the inquiry to the same extent, and in the same way, as the cost of an inquiry which does take place.
(4)The Minister may by regulations prescribe for any description of inquiry a standard daily amount and where an inquiry of that description does take place what may be recovered is—
(a)the prescribed standard amount in respect of each day (or an appropriate proportion of that amount in respect of a part of a day) on which the inquiry sits or the person appointed to hold the inquiry is otherwise engaged on work connected with the inquiry,
(b)costs actually incurred in connection with the inquiry on travelling or subsistence allowances or the provision of accomodation or other facilities for the inquiry,
(c)any costs attributable to the appointment of an assessor to assist the person appointed to hold the inquiry, and
(d)any legal costs or disbursements incurred or made by or on behalf of the Minister in connection with the inquiry.
(5)An order or regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(6)An order applying this section to a statutory provision may provide for the consequential repeal of so much of that provision, or any other provision, as restricts the sum recoverable by the Minister in respect of the services of any officer engaged in the inquiry or is otherwise inconsistent with the application of the provisions of this section.
43Compulsory acquisition of land on behalf of parish or community councils
For section 125 of the Local Government Act 1972 (compulsory acquisition of land on behalf of parish or community councils) substitute— “Compulsory acquisition of land on behalf of parish or community councils.
125(1)If a parish or community council are unable to acquire by agreement under section 124 above and on reasonable terms suitable land for a purpose for which they are authorised to acquire land other than—
(a)the purpose specified in section 124(1)(b) above, or
(b)a purpose in relation to which the power of acquisition is by an enactment expressly limited to acquisition by agreement, they may represent the case to the council of the district in which the parish or community is situated.
(2)If the district council are satisfied that suitable land for the purpose cannot be acquired on reasonable terms by agreement, they may be authorised by the Secretary of State to purchase compulsorily the land or part of it; and the Acquisition of Land Act 1981 shall apply in relation to the purchase.
(3)The district council in making and the Secretary of State in confirming an order for the purposes of this section shall have regard to the extent of land held in the neighbourhood by an owner and to the convenience of other property belonging to the same owner and shall, as far as practicable, avoid taking an undue or inconvenient quantity of land from any one owner.
(4)The order shall be carried into effect by the district council but the land when acquired shall be conveyed to the parish or community council; and accordingly in construing for the purposes of this section and of the order any enactment applying in relation to the compulsory acquisition, the parish or community council or the district council, or the two councils jointly, shall, as the case may require, be treated as the acquiring authority.
(5)The district council may recover from the parish or community council the expenses incurred by them in connection with the acquisition of land under this section.
(6)If a parish or community council make representations to a district council with a view to the making of an order under this section and the district council—
(a)refuse to make an order, or
(b)do not make an order within 8 weeks from the making of the representations or such longer period as may be agreed between the two councils, the parish or community council may petition the Secretary of State who may make the order, and this section and the provisions of the Acquisition of Land Act 1981 shall apply as if the order had been made by the district council and confirmed by the Secretary of State.
(7)In the application of this section to a parish or community council for a group of parishes or communities—
(a)references to the parish or community shall be construed as references to the area of the group, and
(b)if different parts of the area of the group lie in different districts, references to the council of the district in which the parish or community is situated shall be construed as references to the councils of each of the districts acting jointly.”.
44Overhead electricity lines
(1)For section 21 of the Electricity (Supply) Act 1919 (overhead wires) substitute— “Overhead wires.
21(1)The Secretary of State shall before giving consent or authorisation for the placing of an electric line above ground give the local planning authority an opportunity of being heard.
(2)In subsection (1) " local planning authority " has the same meaning as in the Town and Country Planning Act 1971, except that in relation to a non-metropolitan county it includes the county planning authority only—
(a)where the line is to be placed in a National Park; or
(b)where the line is a high voltage line, that is, a line for conveying or transmitting electricity at or above a voltage of 132,000 volts.”.
(2)In section 34 of the Electricity Act 1975 (public inquiries), after subsection (1) (inquiry to be held if local planning authority object) insert—
“(1A)In subsection (1) "local planning authority"—
(a)in relation to an application for consent or authorisation under section 10(b) of the Schedule to the Act of 1899, means a local planning authority required to be given an opportunity of being heard under section 21 of the Electricity (Supply) Act 1919;
(b)in relation to an application for consent under section 2 of the Electric Lighting Act 1909, means a local planning authority required to be given an opportunity of stating an objection under that section.”.
(3)Section 149(3)(a) of the Local Government, Planning and Land Act 1980 (power of Secretary of State to confer functions of local planning authority on urban development corporation) has effect in relation to—section 21 of the Electricity (Supply) Act 1919, and
section 34 of the Electricity Act 1957, so far as applying to an application for consent or authorisation under section 10(b) of the Schedule to the Electric Lighting (Clauses) Act 1899, as it has effect in relation to the provisions listed in Part I of Schedule 29 to the 1980 Act.
45Control of advertisements: experimental areas
In section 63 of the Town and Country Planning Act 1971 (control of advertisements), for subsection (3) (power to make different provision for different areas) substitute—
“(3)Regulations made for the purposes of this section may make different provision with respect to different areas, and in particular may make special provision—
(a)with respect to conservation areas.
(b)with respect to areas defined for the purposes of the regulations as experimental areas, and
(c)with respect to areas defined for the purposes of the regulations as areas of special control.
(3A)An area may be defined as an experimental area for a prescribed period for the purpose of assessing the effect on amenity or public safety of advertisements of a prescribed description.
(3B)An area may be defined as an area of special control if it is—
(a)a rural area, or
(b)an area which appears to the Secretary of State to require special protection on grounds of amenity ; and, without prejudice to the generality of subsection (3), the regulations may prohibit the display in an area of special control of all advertisements except advertisements of such classes (if any) as may be prescribed.”.
46Land adversely affecting amenity of neighbourhood
For section 65 of the Town and Country Planning Act 1971 (proper maintenance of waste land), and the heading preceding it, substitute— “Land adversely affecting amenity of neighbourhood Power to require proper maintenance of land.
65(1)If it appears to the local planning authority that the amenity of a part of their area, or of an adjoining area, is adversely affected by the condition of land in their area, they may serve on the owner and occupier of the land a notice under this section.
(2)The notice shall require such steps for remedying the condition of the land as may be specified in the notice to be taken within such period as may be so specified.
(3)Subject to the provisions of Part V of this Act, the notice shall take effect at the end of such period (not being less than 28 days after the service of the notice) as may be specified in the notice.
(4)In non-metropolitan counties the functions of the local planning authority under this section are exercisable by the district planning authorities.”.
47Areas which may be designated, urban development areas
In section 134 of the Local Government, Planning and Land Act 1980 (power to designate urban development areas), omit subsection (2) (which restricts the power to land in metropolitan districts and certain land in or adjacent to inner London).
48Repeal of unnecessary enactments
(1)The following enactments are repealed—
(a)section 52 of the Requisitioned Land and War Works Act 1945 and paragraph 10 of the Schedule to the Requisitioned Land and War Works Act 1948 (reimbursement of expense of restoring land affected by war works, &c.);
(b)sections 66 to 72 of the Town and Country Planning Act 1971 (special control over industrial development);
(c)sections 250 to 252 of that Act (grants to local authorities for development of land, &c).
(2)The repeal does not affect the operation—
(a)of section 52 of the Requisitioned Land and War Works Act 1945 or paragraph 10 of the Schedule to the Requisitioned Land and War Works Act 1948 in relation to undertakings given before the repeal;
(b)of sections 250 to 252 of the 1971 Act in relation to land for which approval for the purposes of regulations under section 250 was sought before 1st April 1986.
49Minor and consequential amendments; repeals
(1)The Town and Country Planning Act 1971, and certain related enactments, are amended in accordance with Part I of Schedule 11 with respect to the following matters—
(a)the operation of the Use Classes Order on the subdivision of the planning unit;
(b)the provision which may be made by development orders;
(c)the construction of references to certain documents relating to access for the disabled;
(d)applications to vary or revoke conditions attached to planning permission;
(e)the procedure on appeals and applications disposed of without a local inquiry or hearing;
(f)purchase notices;
(g)local inquiries;
(h)the determination of appeals by inspectors ; and
(i)daily penalties for offences ; and that Part also contains amendments consequential on the provisions of this Part.
(2)The enactments specified in Part III of Schedule 12 are repealed to the extent specified.
Scotland

50Listed buildings and conservation areas
The enactments relating to listed buildings and conservation areas are amended in accordance with Part II of Schedule 9 with respect to the following matters—
(a)the treatment of free-standing objects and structures within the curtilage of a listed building ;
(b)late applications for listed building consent;
(c)defence to proceedings under section 53 ;
(d)the grant of listed building consent subject to subsequent approval of detail;
(e)applications for the variation or discharge of conditions attached to listed building consent;
(f)the extent of the exemption accorded to ecclesiastical buildings;
(g)the effect of a listed building enforcement notice ;
(h)the power of a local authority or the Secretary of State to carry out urgent works for the preservation of a building;
(i)the control of demolition in a conservation area ;
(j)the form of an application for listed building consent;
(k)the calling in of applications for listed building consent; and
(l)the application to planning authorities of provisions relating to listed buildings.
51Grants for repair of buildings in town schemes
After section 10B of the Town and Country Planning (Amendment) Act 1972 there shall be inserted the following section “Grants for repair of buildings in town schemes.
10C(1)The Secretary of State may make grants for the purpose of defraying in whole or in part any expenditure incurred or to be incurred in the repair of a building which—
(a)is comprised in a town scheme ; and
(b)appears to him to be of architectural or historic interest.
(2)For the purposes of this section a building is comprised in a town scheme if—
(a)it is in an area—
(i)designated as a conservation area under section 262 of the Act of 1972; and
(ii)appearing to the Secretary of State to be of outstanding architectural or historic interest; and
(b)it is included in a town scheme list or shown on a town scheme map.
(3)In subsection (2) above—
" town scheme list", means a list, compiled, after consultation with the Historic Buildings Council for Scotland, by the Secretary of State and one or more local authorities, of buildings which are to be the subject of a repair grant agreement; and
"town scheme map" means a map, prepared after such consultation by the Secretary of State and one or more local authorities, showing buildings which are to be the subject of such an agreement.
(4)In subsection (3) above—
" repair grant agreement " means an agreement between the Secretary of State and any authority who have participated in the compilation of a town scheme list or the preparation of a town scheme map under which the Secretary of State and the authority or authorities who have so participated have agreed that a specified sum of money shall be set aside for a specified period of years for the purpose of making grants for the repair of the buildings included in the town scheme list or shown on the town scheme map.
(5)A grant under this section may be made subject to conditions imposed by the Secretary of State for such purposes as he may think fit.
(6)Subject to subsection (7) below, before making any grant under this section the Secretary of State may consult with the Council, both as to the making of the grant and as to the conditions subject to which it should be made.
(7)Subsection (6) above shall not apply where the making of a grant appears to the Secretary of State to be a matter of immediate urgency.
(8)The Secretary of State may pay any grant under this section to an authority participating in a town scheme and may make arrangements with any such authority for the way in which the scheme is to be administered.
(9)Arrangements under subsection (8) above may include such arrangements for the offer and payment of grants under this section as may be agreed between the Secretary of State and any authority or authorities participating in a town scheme.
(10)Section 2 of the Local Authorities (Historic Buildings) Act 1962 (recovery of grants made by local authorities on disposal of property within three years) shall apply to a grant made by the Secretary of State under this section as it applies to a grant for the repair of property made by a local authority under that Act; and any reference to a local authority in that section shall accordingly be construed, in relation to a grant under this section, as a reference to the Secretary of State.
(11)In this section "local authority" means a regional, islands or district council.”.
52Termination of grants for redevelopment etc.
(1)No payment of grant under—
(a)sections 237 to 239 of the Town and Country Planning (Scotland) Act 1972,
(b)section 14 of the Housing and Town Development (Scotland) Act 1957, and
(c)section 9 of the Local Government (Scotland) Act 1966 shall be made for the financial year 1986-87 or for any subsequent financial year.
(2)No claim for grant under the enactments mentioned in subsection (l)(a) and (b) above in respect of financial years prior to 1986-87 shall be entertained by the Secretary of State unless—
(a)it is received by him before this Act is passed, and
(b)any information reasonably required by him in relation to any such claim is received by him before the expiry of the period of two months after this Act is passed.
53Minor and consequential amendments; repeals
(1)The Town and Country Planning (Scotland) Act 1972, the Local Government (Scotland) Act 1973 and certain related enactments are amended in accordance with Part II of Schedule 11 with respect to the following matters—
(a)directions as to modifications of local plans;
(b)the operation of the Use Classes Order on the subdivision of the planning unit;
(c)the provision that may be made by development orders ;
(d)applications to vary or revoke conditions attached to planning permission;
(e)land adversely affecting the amenity of the neighbourhood ;
(f)purchase notices;
(g)National Scenic Areas ;
(h)local inquiries;
(i)procedure on applications and appeals disposed of without an inquiry or hearing;
(j)the determination of appeals by appointed persons ;
(k)daily penalties for offences ; and that Part also contains other minor amendments and amendments consequential on the provisions of this Part.
(2)The enactments mentioned in Part IV of Schedule 12 to this Act are repealed to the extent specified.
Provisions common to England and Wales and Scotland

54Effect of modification or termination of enterprise zone scheme
(1)In Schedule 32 to the Local Government, Planning and Land Act 1980 (enterprise zones), for paragraphs 21 and 22 (effect of modification or termination of scheme on planning permission) substitute— “Effect on planning permission of modification or termination of scheme
21Modifications to a scheme do not affect planning permission under the scheme in any case where the development authorised by it has been begun before the modifications take effect.
22(1)Upon an area ceasing to be an enterprise zone planning permission under the scheme shall cease to have effect except in a case where the development authorised by it has been begun.
(2)The following provisions (which provide for the termination of planning permission if the completion of development is unreasonably delayed) apply to planning permission under the scheme where development has been begun but not completed by the time the area ceases to be an enterprise zone—
(a)in England and Wales, subsections (2) to (6) of section 44 of the 1971 Act;
(b)in Scotland, subsections (2) to (6) of section 41 of the 1972 Act.”.
(2)In paragraph 26 of that Schedule (interpretation of Part III of the Schedule), after sub-paragraph (1) insert—
“(1A)The following provisions apply in determining for the purposes of this Schedule when development shall be taken to be begun—
(a)in England and Wales, subsections (1) to (3) of section 43 of the 1971 Act;
(b)in Scotland, subsections (1) to (3) of section 40 of the 1972 Act.”.
55Discrimination in exercise of planning functions
—In Part III of the Race Relations Act 1976 (discrimination in fields other than employment), after section 19 insert— “Planning Discrimination by planning authorities.
19A(1)It is unlawful for a planning authority to discriminate against a person in carrying out their planning functions.
(2)In this section " planning authority " means—
(a)in England and Wales, a county, district or London borough council, a joint planning board, a special planning board or a National Park Committee, and
(b)in Scotland, a planning authority or regional planning authority, and includes an urban development corporation and a body having functions (whether as an enterprise zone authority or a body invited to prepare a scheme) under Schedule 32 to the Local Government, Planning and Land Act 1980.
(3)In this section " planning functions " means—
(a)in England and Wales, functions under the Town and Country Planning Act 1971, and such other functions as may be prescribed, and
(b)in Scotland, functions under the Town and Country Planning (Scotland) Act 1972 or Part IX of the Local Government (Scotland) Act 1973, and such other functions as may be prescribed, and includes, in relation to an urban development corporation, planning functions under Part XVI of the Local Government, Planning and Land Act 1980 and, in relation to an enterprise zone authority or body invited to prepare an enterprise zone scheme, functions under Part XVIII of that Act.”.
Part VII
General Provisions

56Financial provisions
(1)There shall be paid out of money provided by Parliament any expenses of the Secretary of State under this Act and any increase attributable to this Act in the sums so payable under any other enactment.
(2)Any sums received by the Secretary of State under this Act shall be paid into the Consolidated Fund.
(3)There shall be paid out of or into the Consolidated Fund or the National Loans Fund any increase attributable to this Act in the sums so payable under any other enactment.
57Commencement
(1)The following provisions of this Act come into force on the day this Act is passed—section 21 (effect of resolutions relating to housing action area or general improvement area);
section 24(l)(j), paragraphs 10 to 13 of Schedule 5, the repeals specified in the first part of Part I of Schedule 12 and section 24(3) so far as relating to those repeals (miscellaneous corrections);
section 52 (termination of grants for redevelopment in Scotland) ;
this Part.
(2)The other provisions of this Act come into force on such day as may be appointed by the Secretary of State by order made by statutory instrument and—
(a)different days may be appointed for different provisions or different purposes; and
(b)an order may make such transitional provision as the Secretary of State thinks appropriate.
(5)For the purpose of any transitional provision in this Act or an order which refers to the date of service of a notice under the Housing Act 1985, no account shall be taken of any steps taken under section 177 of that Act (amendment or withdrawal and re-service of notice to correct mistakes).
58Extent
(1)The following provisions of this Act extend to England and Wales—Part I (housing), except section 3, paragraphs 10(7), 14 and 17 of Schedule 5 and the associated repeals in Part I of Schedule 12;
in Part II (simplified planning zones), section 25 and Parts I and II of Schedule 6;
Part III (financial assistance for urban regeneration);
in Part IV (hazardous substances), sections 30 to 34 and Part I of Schedule 7;
Part V (opencast coal);
in Part VI (miscellaneous provisions), sections 40 to 49, 54 and 55, Part I of Schedule 9, Schedule 10, Part I of this Part.
(2)The following provisions of this Act extend to Scotland—in Part I (housing), sections 3, 19 and 22, paragraphs 8, 10(7), 13, 14, 17, 18 and 42 of Schedule 5 and the associated repeals in Part I of Schedule 12 ;
in Part II (simplified planning zones), section 26 and Parts III. and IV of Schedule 6 ;
Part III (financial assistance for urban regeneration);
in Part IV (hazardous substances), sections 35 to 38 and Part II of Schedule 7;
Part V (opencast coal), except so far as it repeals enactments which extend to England and Wales only;
in Part VI (miscellaneous provisions), sections 50 to 55, Part II of Schedule 9, Part II of Schedule 11 and Part IV. of Schedule 12 ;
this Part.
(3)The following provisions of this Act extend to Northern Ireland—section 22 (amendments of Consumer Credit Act 1974), paragraph 18 of Schedule 5 (amendment relating to stamp duty),
this Part.
59Short title
This Act may be cited as the Housing and Planning Act 1986.

###

1Salmon fishery districts
(1)A salmon fishery district shall be the area within the coastal limits of a district (within the meaning of the Salmon Fisheries (Scotland) Acts 1862 to 1868) and extending—
(a)seaward for three miles from mean low water springs, and
(b)landward to include the catchment area of each river which flows directly or indirectly into the sea within these limits but excluding any area designated as a salmon fishery district by an order made under subsection (2) below.
(2)Notwithstanding subsection (1) above, the Secretary of State may, in accordance with section 2 of this Act, by order designate any area as a salmon fishery district, whether or not it includes all or part of a salmon fishery district—
(a)established by subsection (1) above; or
(b)already designated as such by an order made under this subsection; and such an order is referred to in this Act as a " designation order ".
(3)Districts within the meaning of the Salmon Fisheries (Scotland) Acts 1862 to 1868 shall cease to exist and, subject to subsection (6) below—
(a)any reference in any enactment to a particular district within that meaning shall be construed as a reference to the salmon fishery district established by subsection (1) above which has the same coastal limits as that district; and
(b)for references in any enactment, excluding this Act, to such districts in general there shall be substituted references to salmon fishery districts and a salmon fishery district which has the same coastal limits as a district within the meaning of these Acts shall have the same name as that district.
(4)After consulting such persons as he thinks fit, the Secretary of State may, by order made by statutory instrument—
(a)where an island or part of an island is not within the area of a salmon fishery district by virtue of subsections (1) or (2) above, include in the area of a salmon fishery district—
(i)that island or that part; and
(ii)the sea within three miles from mean low water springs on that island or that part;
(b)where there is doubt as to whether a particular place is in a particular salmon fishery district, make provision for the purpose of removing that doubt; or
(c)change a reference used in describing a salmon fishery district where the suitability of that reference for that purpose has lessened or ceased but such an order shall not create a salmon fishery district.
(5)The River Tweed shall not be a salmon fishery district except as otherwise provided in this Act
(6)References in the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951 and in any other enactment as amended by that Act to a district shall be construed as including references to the River Tweed.
2Designation orders
(1)A designation order shall provide for the abolition of such salmon fishery districts as are superseded by the district so designated.
(2)A designation order shall provide for the application to the district so designated of such regulations—
(a)made under section 3 of this Act; or
(b)made under the Salmon Fisheries (Scotland) Acts 1862 to 1868 as respects the matters specified in section 6(6) of the Salmon Fisheries (Scotland) Act 1862 as the Secretary of State specifies in the order and he may, in such an order, amend regulations made under section 3 (2) (d) of this Act or under section 6(6) of that Act in their application under this subsection.
(3)Subject to section 6(1) of this Act, a designation order shall specify for the district so designated the annual close time and the periods within that time when it is permitted to fish for and take salmon by rod and line; and the order may make different provision for different parts of the district.
(4)The power under section 1(2) of this Act to make a designation order shall not extend to the River Tweed.
(5)Schedule 1 shall have effect as to the procedure in the making of a designation order.
(6)The Secretary of State may by order vary the provisions of Schedule 1 to this Act.
(7)An order under subsection (6) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
General regulation of salmon fisheries

3Regulations
(1)Subject to subsection (4) below, regulations made under the Salmon Fisheries (Scotland) Acts 1862 to 1868 as respects the matters specified in section 6(6) of the Salmon Fisheries (Scotland) Act 1862 shall have effect in relation to a salmon fishery district as they had effect, immediately before the commencement of this section, in relation to the part of that salmon fishery district which was a district within the meaning of these Acts and which had the same coastal limits as that salmon fishery district.
(2)The Secretary of State shall have power, after consulting such persons as he considers appropriate, to make regulations with respect to—
(a)the due observance of the weekly close time ;
(b)the construction and use of cruives;
(c)the construction and alteration of dams, including mill dams, or lades or water wheels so as to afford a reasonable means for the passage of salmon;
(d)the meshes, materials and dimensions of nets used in fishing for or taking salmon ;
(e)obstructions in rivers or estuaries to the passage of salmon;
(f)the construction, alteration and use for the control of the passage of salmon of—
(i)screens in off-takes from inland waters; and
(ii)structures associated with such screens.
(3)The Secretary of State shall have power, after consulting such persons as he considers appropriate, to make regulations amending section 13 of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951 (extent of the weekly close time and the period within which rod and line fishing is permitted); provided always that such regulations shall not shorten the periods specified in the said section 13.
(4)The power to make regulations under subsection (2) above includes power to revoke any regulations as described in subsection (1) above; and such regulations shall be treated as revoked insofar as they are inconsistent with the provisions of regulations made under this section.
(5)The power to make regulations under paragraphs (c) or (f) of subsection (2) above includes power to except from the application of a regulation or part of a regulation any works or any category of works; and section 11 of the Salmon Fisheries (Scotland) Act 1868 shall apply to regulations so made.
(6)The power to make regulations under subsection (2)(d) above includes power—
(a)to make different provision for different districts or different parts of a district;
(b)to except from the application of a regulation or part of a regulation a district or part of a district specified in the regulations.
(7)References in any enactment, other than in this Act or in section 36 of the Salmon Fisheries (Scotland) Act 1868, to—
(a)byelaws or regulations made under the Salmon Fisheries (Scotland) Acts 1862 to 1868 as respects the matters specified in section 6(6) of the Salmon Fisheries (Scotland) Act 1862; or
(b)the provisions of any of the Schedules to that Act of 1868 relating to such matters shall be construed as including references to regulations made under subsection (2) above.
(8)Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
4Private generating stations
(1)In subsection (2) of section 5 of the Electricity (Scotland) Act 1979 (formation of Fisheries Committee), after the words " Secretary of State " where they first occur there shall be inserted the words
“, to a body or person who wishes to establish or extend a private generating station under section 35”.
(2)After subsection (1) of section 35 (control of private hydroelectric generating stations), there shall be inserted the following subsections—
“(1A)A person or body wishing to establish or extend any such station shall prepare proposals with a view to the execution of the necessary works and paragraphs 2, 3 and 6 of Schedule 4 to this Act shall have effect in relation to such proposals as if they were constructional schemes proposed under section 10 of this Act and, for the purposes of this subsection, references in that Schedule to the Boards shall be construed as references to such a person or body.
(1B)The Secretary of State may make his consent under subsection (1) above conditional on the acceptance by the person or body of any recommendation made under paragraph 3 of Schedule 4 to this Act relating to the proposed establishment or extension; and such person or body shall be bound to implement such recommendation in executing the proposed works.”.
(3)In paragraph 1 of Schedule 4 (constitution and functions of Fisheries Committee), after the words " Secretary of State " where they secondly occur there shall be inserted the words
“, to a body or person who wishes to establish or extend a private generating station under section 35”.
5Enforcement of regulations
(1)In section 15 of the Salmon Fisheries (Scotland) Act 1868 (offences related to regulations)—
(a)for the words from the beginning to " following offences " there shall be substituted the words
“Any person”;
(b)paragraph (7) shall be omitted; and
(c)for the words from " shall for every such offence " to the end there shall be substituted the words
“shall be guilty of an offence; and section 19 of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951 (forfeiture of fish, instruments, articles, vehicles or boats) shall apply in relation to persons convicted of an offence under this section as it applies to those convicted of an offence under Part I or section 13 of that Act”.
(2)Without prejudice to the generality of section 3(7) of this Act, in section 15 of that Act, "byelaw"—
(a)in paragraph (8), shall include regulations made under section 3(2) of this Act and the offence specified in that paragraph shall, as respects such regulations, extend to so much of the River Tweed as is situated outwith Scotland ; and
(b)in paragraphs (2), (3) and (4), shall include such regulations except to the extent that they extend to the River Tweed.
6Annual close time
(1)The annual close time for a salmon fishery district shall be a continuous period of not less than 168 days and shall apply to every mode of fishing for and taking salmon except to the extent that provision is made for periods within that time during which it is permitted to fish for and take salmon by rod and line.
(2)Subject to subsection (3) below, the dates of the annual close time and the periods within that time when it is permitted to fish for and take salmon by rod and line shall be, in the case of any particular district—
(a)the dates and periods specified in the designation order made in respect of that district; or
(b)where no designation order has been made in respect of that district, the dates and periods which were determined under section 6(5) of the Salmon Fisheries (Scotland) Act 1862, subject to any variation made under section 9 of the Salmon Fisheries (Scotland) Act 1868, which, immediately before the commencement of this section, were in force as respects the district within the meaning of the Salmon Fisheries (Scotland) Acts 1862 to 1868 which had the same coastal limits as that salmon fishery district.
(3)Notwithstanding subsection (2) above, the Secretary of State may, subject to subsection (1) above, by order prescribe for any district the dates of the annual close time and the periods within that time when it is permitted to fish for and take salmon by rod and line and he may make different provision for different parts of a district; and such an order is referred to in this Act as an " annual close time order ".
(4)The Secretary of State may make an annual close time order in respect of a salmon fishery district only on application to him by—
(a)the district salmon fishery board for that district; or
(b)where there is no such board, two proprietors of salmon fisheries in that district.
(5)An application under subsection (4) above shall be accompanied by the applicant's written proposals which shall state—
(a)the proposed dates of the anual close time and the periods within that time when it shall be permitted to fish for and take salmon by rod and line in the district; and
(b)the general effect of the proposals and the proposals may include different dates and periods for different parts of the district.
(6)Paragraphs 3 to 9 of Schedule 1 to this Act shall apply to the making of an annual close time order as they apply to the making of a designation order, and for this purpose—
(a)references to a designation order shall be construed as references to an annual close time order ; and
(b)references to an applicant, and to an application, under paragraph 1 shall be construed respectively as references to an applicant, and to an application, under subsection (4) above.
(7)References in any enactment, other than in this Act, to—
(a)regulations or byelaws made under the Salmon Fisheries (Scotland) Acts 1862 to 1868 as respects the matters specified in section 6(5) of the Salmon Fisheries (Scotland) Act 1862; or
(b)the provisions of Schedule C to the Salmon Fisheries (Scotland) Act 1868 relating to such matters shall be construed as including references to an annual close time order or to such part of a designation order as provides for the annual close time for a salmon fishery district.
7Estuary limits
(1)Subject to subsection (2) below, the estuary limits of a river shall be the limits fixed by judicial decision or fixed and defined under section 6(1) of the Salmon Fisheries (Scotland) Act 1862.
(2)Whether or not a river has estuary limits as described in subsection (1) above, the Secretary of State may, by order, prescribe limits or, as the case may be, different limits which shall be the estuary limits for that river ; and such an order is referred to in this Act as an " estuary limits order ".
(3)The Secretary of State may make an estuary limits order only on application to him by—
(a)the district salmon fishery board for the district in which the river is situated ; or
(b)where there is no such board, two proprietors of salmon fisheries in that district.
(4)An application under subsection (3) above shall be accompanied by the applicant's written proposals which shall state—
(a)the proposed estuary limits ; and
(b)the general effect of the proposals.
(5)Paragraphs 3 to 9 of Schedule 1 to this Act shall apply to the making of an estuary limits order as they apply to the making of a designation order, and for this purpose—
(a)references to a designation order shall be construed as references to an estuary limits order ; and
(b)references to an applicant, and to an application, under paragraph 1 shall be construed respectively as references to an applicant, and to an application, under subsection (3) above.
(6)For the purposes of this section—" estuary limits " means limits which divide each river including its mouth or estuary from the sea ; and " river " does not include the River Tweed.
(7)References in any enactment, other than in this Act or in section 36 of the Salmon Fisheries (Scotland) Act 1868, to—
(a)byelaws or regulations made under the Salmon Fisheries (Scotland) Acts 1862 to 1868 as respects the matters specified in section 6(1) of the Salmon Fisheries (Scotland) Act 1862; or
(b)the provisions of Schedule B to the Salmon Fisheries (Scotland) Act 1868 relating to such matters shall be construed as including references to an estuary limits order.
8Use of baits and lures
(1)The Secretary of State may, subject to the provisions of this section, make regulations specifying baits and lures for the purposes of the definition of " rod and line " in section 24 of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951.
(2)The Secretary of State may make regulations under this section only on—
(a)application to him by a district salmon fishery board ; or
(b)a joint application to him by more than one such board, and regulations made in respect of such application shall be made only in respect of the district of the applicant.
(3)Regulations under this section shall specify, subject to such exceptions as may be provided therein, all or any, or a combination of, the following—
(a)baits and lures or classes of baits and lures ;
(b)times when the regulations apply ;
(c)areas to which the regulations apply.
(4)An application under subsection (2) above shall be accompanied by the applicant's written proposals which shall state—
(a)the baits and lures which it is proposed should be specified;
(b)the places to which and the times during which the proposed regulations should apply ; and
(c)the reasons for the proposals.
(5)Paragraphs 3 to 9 of Schedule 1 to this Act shall apply to the making of regulations under this section as they apply to the making of a designation order, and for this purpose—
(a)references to a designation order shall be construed as references to regulations under this section ; and
(b)references to an applicant, and to an application, under paragraph 1 shall be construed respectively as references to an applicant, and to an application, under subsection (2) above.
(6)In section 24(1) of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951, at the end of the definition of " rod and line " there shall be inserted the following—
“and, in the case of fishing for salmon in an area to which and at a time during which regulations made under section 8 of the Salmon Act 1986 apply, is not specified in such regulations in respect of that area and time”.
9Limits of the Solway Firth
References in any enactment to the limits of the Solway Firth shall be construed as references to the limits which were fixed under section 6(2) of the Salmon Fisheries (Scotland) Act 1862.
10Application of regulations and annual close time orders to the River Tweed
(1)The byelaw enacted by section 10 of the Salmon Fisheries (Scotland) Act 1868 as Schedule G to that Act, as amended by any other enactment, and so much of section 15 of that Act as relates thereto shall continue to have effect in relation to the River Tweed as it had effect before the commencement of this section.
(2)Regulations made under section 3 of this Act shall have effect in relation to the River Tweed but the power to make regulations under subsection (1)(d) of that section includes power to except the River Tweed from the application of any such regulation.
(3)Where such regulations have effect in relation to the River Tweed—
(a)references to a salmon fishery district shall include references to the River Tweed ; and
(b)references to a district salmon fishery board shall include references to the River Tweed Council unless the contrary intention appears.
(4)Subsections (3), (4)(a), (5) and (6) of section 6 and section 8 of this Act shall have effect in relation to the River Tweed with the following modifications—
(a)references to a salmon fishery district shall include references to the River Tweed;
(b)references to a district salmon fishery board shall include references to the River Tweed Council and Schedule 1 to this Act shall, for the purposes of this subsection, be construed accordingly.
(5)In making an annual close time order in respect of the River Tweed, the Secretary of State may prescribe an annual close time, being a continuous period of not less than 153 days.
(6)The power to make regulations under—
(a)section 3(2)(a) of this Act includes power to amend section 12 of the Tweed Fisheries Amendment Act 1859;
(b)section 3(2)(d) of this Act includes power to amend sections 12 and 13 of that Act of 1859; and
(c)section 3(2)(e) of this Act includes power to amend section 57 of the Tweed Fisheries Act 1857 ; and
(d)section 8 of this Act includes power to amend section 6 of the Tweed Fisheries Amendment Act 1859 and the power to make an annual close time order in respect of the River Tweed includes power to amend section 6, 10 and 11 of that Act of 1859.
(7)This section extends to so much of the River Tweed as is situated outwith Scotland.
Proprietors

11Qualified proprietors and upper and lower proprietors
(1)A qualified proprietor shall be, for the purposes of this Act, a proprietor of a salmon fishery entered in the valuation roll.
(2)Where any salmon fishery is not entered or not entered separately in the valuation roll, the assessor shall, on the request of—
(a)the clerk to the district salmon fishery board for the district in which the fishery is situated ; or
(b)where there is no such board for the district, the proprietor of that fishery, value that fishery and enter it in the valuation roll.
(3)If a salmon fishery is situated in more than one salmon fishery district the assessor shall, on the request of—
(a)the clerk to the district salmon fishery board for either or any of these districts; or
(b)where there is no such board, the proprietor of that fishery value that fishery and enter it in the valuation roll according to its value in each district.
(4)A qualified proprietor shall be an upper proprietor or a lower proprietor for the purposes of this Act according to whether his salmon fishery is, respectively, upstream or downstream of a division of a river as defined in subsection (7) below and, in this Act, " upper proprietor " and " lower proprietor " each mean a qualified proprietor.
(5)A qualified proprietor shall be both an upper proprietor and a lower proprietor if he is a qualified proprietor of one salmon fishery situated above and another situated below a division referred to in subsection (4) above, whether or not both fisheries are on the same river in the district, and he may act in either capacity or in both capacities in accordance with the provisions of this Act.
(6)Subject to subsection (5) above, a qualified proprietor in a salmon fishery district shall not be eligible for election, co-option or appointment to the district salmon fishery board for that district in respect of more than one salmon fishery.
(7)The division referred to in subsection (4) above shall be—
(a)a line across the river between points on either bank prescribed by the Secretary of State under subsection (8) below; or
(b)where the Secretary of State has not prescribed such points but a point of division has been fixed in accordance with section 6(4) of the Salmon Fisheries (Scotland) Act 1862, that point of division; or
(c)where no division has been effected under paragraphs (a) or (b) above, the normal tidal limit.
(8)When requested to do so by the district salmon fishery board for the district in which a river is situated, the Secretary of State may, by order made by statutory instrument, prescribe a point on each bank of the river to which the request relates.
(9)The clerk to a district salmon fishery board shall maintain a roll showing—
(a)the upper and lower proprietors in the district; and
(b)the values of their fisheries as entered in the valuation roll; and the board may, if they are satisfied that a name should be added or removed, add or remove it.
(10)Subject to section 5 of the Sheriff Courts (Scotland) Act 1907 (jurisdiction as regards heritable property), the sheriff may, on summary application made to him by a person whose request to the board to add or remove a name has not been met, order the board to add or remove that name.
12Sole proprietor in a salmon fishery district
(1)Where, after the commencement of this section, there is in a salmon fishery district only one proprietor of salmon fisheries, for references in this Act, except under paragraph 1 of Schedule 2 to this Act, to two proprietors of salmon fisheries in a salmon fishery district for which there is no board there shall be substituted references to that sole proprietor.
(2)Where, immediately before the commencement of this section, there is a sole proprietor in a district within the meaning of the Salmon Fisheries (Scotland) Acts 1862 to 1868, the powers of a district board conferred on him by section 19 of the Salmon Fisheries (Scotland) Act 1862 shall, on the commencement of this Act, cease to be exercisable by him.
(3)A person appointed as a water bailiff by a sole proprietor mentioned in subsection (2) above shall, on the commencement of this section, cease to have the powers and duties of a water bailiff conferred on him by or under any enactment to the extent that such powers and duties relate to that appointment.
13Mandatories
(1)A qualified proprietor or an elected member or chairman of a district salmon fishery board may at any time authorise a person to act for him ; and such a person is referred to in this Act as a " mandatory ".
(2)A mandatory may as such be elected under Schedule 2 to this Act as a representative of qualified proprietors or as chairman but a person may not authorise another to act as a co-opted member under this Act nor shall a mandatory be co-opted under section 16(2) of this Act.
(3)A person who is both an upper and a lower proprietor by virtue of section 11(5) of this Act may authorise a person in accordance with this section in either or both of his capacities or may do so in each capacity.
District salmon fishery boards

14District salmon fishery boards
(1)If proprietors of salmon fisheries in a salmon fishery district—
(a)form an association for the purpose of the protection or improvement of the fisheries within their district; and
(b)elect, in accordance with Schedule 2 to this Act, a committee to act for them, that committee shall be the district salmon fishery board for that district; and the purpose of such a board shall be the purpose specified above in respect of the association.
(2)A district salmon fishery board shall have the powers and duties conferred—
(a)on them under this Act; and
(b)by any other enactment on a district board within the meaning of the Salmon Fisheries (Scotland) Acts 1862 to 1868; and references in any enactment, other than in this Act, to a district board within the meaning of the Salmon Fisheries (Scotland) Acts 1862 to 1868 shall be construed as references to a district salmon fishery board.
(3)Subject to subsection (4) below, a committee mentioned in subsection (1) above shall cease to be the district salmon fishery board for a district on the expiry of a period of three years from the date of the last meeting of proprietors which elected, in accordance with Part I of Schedule 2 to this Act, such members as require to be elected under Part II of that Schedule.
(4)On the coming into force of a designation order—
(a)the transitional district board for ; or
(b)the committee within the meaning of this section in respect of a district superseded by the district so designated, as the case may be, shall cease to be a district salmon fishery board; and the committee within the meaning of this section which has been constituted in accordance with Schedule 2 to this Act in anticipation of the order and in respect of the district designated by the order shall be the district salmon fishery board for that district.
(5)If a committee ceases to be a district salmon fishery board, the assets and liabilities of that board shall be the assets and liabilities of the members of the association for which the committee acts; but, for the purposes of the winding-up of such an association, any assets of the former board remaining after the settlement of the liabilities of the former board shall be distributed amongst all the proprietors in the district who were liable to the fishery assessment immediately before the date on which the committee ceased to be such a board, according to the valuation of each fishery as entered in the valuation roll at that date.
(6)A district salmon fishery board shall not be bound by any direction given to them by the association for which the elected members of the board act as a committee.
(7)Nothing in this section shall affect the powers and duties of the River Tweed Council.
(8)The powers and duties under any enactment of district boards constituted in accordance with the Salmon Fisheries (Scotland) Acts 1862 to 1868 shall cease to have effect in relation to such boards and Schedule 3 to this Act shall have effect as respects such a board which was in office immediately before the commencement of this section; and such a board is referred to in this Act as a " transitional district board ".
(9)There may be a district salmon fishery board for a district whether or not there are salmon in the waters of that district.
(10)The Secretary of State may by order vary the provisions of Schedule 2 or Schedule 3 to this Act.
(11)An order under subsection (10) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
15Financial powers and duties of district salmon fishery boards
(1)Each year, a district salmon fishery board shall prepare—
(a)a report; and
(b)a statement of accounts, which shall be audited, relating to the activities of the board ; and the clerk of the board shall call an annual meeting of qualified proprietors in the district for the purposes of considering the report and the audited accounts.
(2)A district salmon fishery board shall have power to impose an assessment, to be known as the fishery assessment, on each salmon fishery in their district.
(3)The fishery assessment shall be assessed at such uniform rate or rates as are determined for all fisheries in the district by the board and shall be exigible according to the valuation of a fishery as entered in the valuation roll.
(4)Subsections (2) and (3) of section 11 of this Act shall apply for the purposes of this section as they apply for the purposes of that section.
(5)Arrears of fishery assessment may be recovered by—
(a)the district salmon fishery board which imposed the assessment; or
(b)the district salmon fishery board for a district created by a designation order in respect of an assessment imposed by a district salmon fishery board for a district superseded by that order; or
(c)the district salmon fishery board which replaced a transitional district board in respect of an assessment imposed by the transitional district board, as the case may be, by action for payment of money.
(6)Any of the boards mentioned in subsection (5) above may recover arrears of fishery assesment which were due immediately before the commencement of this section under section 23 of the Salmon Fisheries (Scotland) Act 1862 in respect of any part of their district.
(7)The powers under subsections (5) and (6) above to recover arrears of fishery assessment include power to recover interest, chargeable at such rate as the Secretary of State shall, with the consent of the Treasury, determine, on such arrears from—
(a)in the case of recovery of arrears under subsection (5) above which have been outstanding for at least three months from the date of issue of a notice of assessment, that date; or
(b)in the case of recovery of arrears under subsection (6) above which have been outstanding for at least three months from the date of the coming into force of this section, that date, until payment or the commencement of an action for payment, whichever is the earlier.
(8)A board may, in carrying out its purpose under this Act, borrow—
(a)an amount not exceeding twice the amount of the fishery assessment collected within the twelve month period immediately prior to the date of the decision to borrow ; or
(b)such higher sum as is approved by the proprietors of fisheries which together amount to four fifths of the total value of fisheries in the district as entered in the valuation roll.
(9)In subsection (8)(a) above, " collected " means collected in—
(a)the district for which that board is the district salmon fishery board; and
(b)if that district has been designated in an order made under section 1(2) of this Act within that twelve month period, all the districts superseded by that order.
(10)In carrying out its purpose, a district salmon fishery board may authorise expenditure, including expenditure for the acquisition of heritable property, out of sums accruing to it from—
(a)the fishery assessment;
(b)the exercise of the power, under subsection (8) above, to borrow; or
(c)any other source ; but it shall not pay to any member of that board any salary or fees for his acting in any way as a member of or under that board.
16General powers and duties of district salmon fishery boards
(1)A district salmon fishery board may do such acts, execute such works and incur such expenses as may appear to them expedient for—
(a)the protection or improvement of the fisheries within their district;
(b)the increase of salmon ; or
(c)the stocking of the waters of the district with salmon.
(2)The elected members of a district salmon fishery board shall, in accordance with Part II of Schedule 2 to this Act, co-opt representatives of salmon anglers and tenant netsmen.
(3)On such terms and conditions as the board think fit, a district salmon fishery board—
(a)shall appoint a person to act as clerk to the board ; and
(b)may appoint persons to act as water bailiffs, or in such other capacity as the board see fit.
(4)A district salmon fishery board may sue or be sued in the name of their clerk.
(5)References in any enactment to water bailiffs shall include references to water bailiffs appointed under this section.
17Proceedings of district salmon fishery boards
(1)The first meeting of a district salmon fishery board shall be at the date, time and place determined by the members of the board who were elected at the meeting of qualified proprietors called under paragraph 1 of Schedule 2 to this Act but in any case shall be no later than 21 days after that meting.
(2)A district salmon fishery board shall determine the quorum for their meetings.
(3)At any meeting of the board, each member shall have one vote, subject to the following exceptions—
(a)the chairman, in his capacity as such, shall have both a casting and a deliberative vote ; and
(b)a person who is both an upper proprietor and a lower proprietor by virtue of section 11(5) of this Act shall have a vote in either capacity or in both capacities according to the capacity or capacities in which he has been elected or co-opted.
(4)No act or proceeding of a district salmon fishery board shall be questioned on account of any vacancy in their membership and no defect in the qualification or appointment of any person acting as a member shall vitiate any proceedings of the board in which that member has taken part.
(5)The minutes of proceedings of district salmon fishery boards shall be signed by the chairman and shall be conclusive evidence of the proceedings ; and a meeting so minuted shall be presumed to have been duly convened and held and all members thereof to have been duly qualified.
(6)On the written request of any two members of the board, the chairman shall be bound to convene a meeting of the board within fourteen days of receiving the request and the clerk shall give notice to each member of the date, time and place of and the agenda for that meeting.
18Tenure of office
(1)Before the expiry of a period of three years from—
(a)the first election of the members of the board ; or
(b)the last meeting of qualified proprietors called under this section; the clerk to that board shall call a meeting of qualified proprietors in that district for the purpose of electing or re-electing, in accordance with Part I of Schedule 2 to this Act, such members as require to be elected under Part II of that Schedule; and at that meeting each member of the board shall resign.
(2)The provisions of Schedule 2 to this Act, apart from paragraph 1, shall apply to further elections as they apply to the first election of the members.
(3)Without prejudice to subsection (1) above, a member of a district salmon fishery board may resign at any time and where a person ceases to meet the requirements of this Act for membership of a district salmon fishery board he shall cease to be a member of that board.
(4)Where a person is both an upper and a lower proprietor by virtue of section 11(5) of this Act, subsection (3) above shall have effect as respects either or each such capacity.
(5)Where a vacancy in their number occurs, the board shall, so far and as soon as is reasonably practicable, fill that vacancy by
(a)the electing by the elected members from amongst themselves of a new chairman ;
(b)the appointing by the elected members of a qualified proprietor in the district as a representative of qualified proprietors according to the rules in Schedule 2 to this Act regarding the balance between upper and lower proprietors; and
(c)the co-opting by the board of a representative of salmon anglers or of tenant netsmen in accordance with that Schedule, as the case may be, and a person appointed under paragraph (b) above shall be an elected representative of qualified proprietors for the purposes of this Act.
Application to the Esk

19Application of Part I to the River Esk
The provisions of Part I of this Act shall not apply to so much of the River Esk, including its banks and tributary streams, as is situated in Scotland.
Part II
Other Provisions Applying to Scotland

20Additional powers in respect of licensing and regulation of salmon dealing
(1)Without prejudice to the generality of section 44 of the Civic Government (Scotland) Act 1982 (power to designate additional activities as subject to licensing and regulation) an order as respects dealing in salmon made under that section may—
(a)define dealing in salmon and so define it as to—
(i)include such acts preparatory to or connected with dealing in salmon;
(ii)exclude dealing in such class or classes of salmon as may be specified in the order;
(b)provide that the offence under section 7(1) of that Act (doing anything for which a licence is required without having one) shall be punishable—
(i)on summary conviction, by imprisonment for a term not exceeding three months, or a fine not exceeding the statutory maximum or both;
(ii)on conviction on indictment, by imprisonment for a term not exceeding two years, or a fine or both;
(c)provide that it shall be an offence for any person, other than a person holding a salmon dealer's licence, to buy salmon from or sell salmon to a person not having such a licence;
(d)provide that the offences under the said section 7(1) and any provision under paragraph (c) above shall be subject to such exceptions as may be specified in the order;
(e)provide that a licence shall be required only for such class or classes of dealing in salmon and dealing in such class or classes of salmon as may be specified in the order;
(f)provide as to the exercise of powers of entry and search by water bailiffs and persons appointed by the Secretary of State under section 10(5) of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951 but not so as to enable these powers to be exercised in any dwelling house or any yard, garden, outhouses and pertinents belonging thereto or usually enjoyed therewith.
(2)The Secretary of State shall have power, by order to prescribe, or to prescribe the maximum amounts of, the fees which the licensing authority may determine and charge under sub-paragraph (1) of paragraph 15 of Schedule 1 to the said Act of 1982 in respect of the licensing of dealing in salmon; and in that respect the licensing authority's powers under that paragraph shall be subject to the provisions of any such order.
(3)An order made under subsection (2) above shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
21Permitted methods of fishing for salmon
In section 2 of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951 (methods of fishing)—
(a)after subsection (1) there shall be inserted the following subsection—
“(1A)No person shall fish for or take salmon in any waters in a salmon fishery district other than inland waters, except by rod and line, net and coble or bag net, fly net or other stake net.”
(b)after subsection (2) there shall be inserted the following subsections—
“(2A)After consulting such persons as he considers appropriate, the Secretary of State may, for the purposes of this section, by regulations define fishing for or taking salmon by—
(a)net and coble ;
(b)bag net, fly net or other stake net, whether by reference to anything used for the purpose, or to the circumstances in which or method by which it is so used, or to any combination thereof; and, in relation to net and coble, may make different provision as respects inland waters from that made as respects other waters.
(2B)The power to make regulations under this section includes power to amend or repeal section 62 of the Tweed Fisheries Act 1857 and section 12 and 13 of the Tweed Fisheries Amendment Act 1859.
(2C)Regulations made under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”.
22Offence of possessing salmon which have been illegally taken, killed or landed
(1)After section 7 of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951 there shall be inserted the following section— “Offence of possessing salmon which have been illegally taken, killed or landed.
7A(1)A person who—
(a)is in possession of salmon and believes; or
(b)is in possession of salmon in circumstances in which it would be reasonable for him to suspect that a relevant offence has at any time been committed in relation to the salmon shall be guilty of an offence and liable—
(i)on summary conviction to imprisonment for a term not exceeding three months, or to a fine not exceeding the statutory maximum or both;
(ii)on conviction on indictment to imprisonment for a term not exceeding two years, or to a fine or both.
(2)It shall be a defence in proceedings for an offence under this section to show that no relevant offence had in fact been committed in relation to the salmon.
(3)It shall be lawful to convict a person charged under this section on the evidence of one witness.
(4)For the purposes of this section an offence is a relevant offence in relation to a salmon if—
(a)it is committed by taking, killing or landing that salmon, either in Scotland or in England and Wales; or
(b)that salmon is taken, killed or landed, either in Scotland or in England and Wales in the course of the commission of the offence.
(5)In subsection (4) above, " offence ", in relation to the taking, killing or landing of salmon either in Scotland or in England or Wales, means an offence under the law applicable to the place where the salmon is taken, killed or landed.
(6)A person shall not be guilty of an offence under this section in respect of conduct which constitutes a relevant offence in relation to any salmon or in respect of anything done in good faith for purposes connected with the prevention or detection of crime or the investigation or treatment of disease.
(7)Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of the offence and shall be liable to be proceeded against and punished accordingly.
(8)Where the affairs of a body corporate are managed by its members, subsection (7) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.”.
(2)In section 11 of that Act (power of search)—
(a)in each of subsections (1) and (3) for the words " three and four" there shall be substituted " 1 to 4, 7 and 7A œœ;
(b)after the said subsection (3) there shall be inserted the following subsection—
“(3A)Where a constable has reasonable grounds for suspecting that an offence against section 7A of this Act is being committed and that evidence of the commission of the offence is to be found in any premises (other than a dwelmg-house or any yard, garden, outhouses and pertinents belonging thereto or usually enjoyed therewith) but by reason of urgency or other good cause it is impracticable to apply for a warrant to search such premises, he may search them without warrant.”;
(c)in subsection (4)—
(i)for the words " section three or section four " there shall be substituted
“any of the provisions of sections 1 to 4, 7 and 7A”;
(ii)after the word " thereon " there shall be inserted the words— “or in any stationary vehicle on—
(a)a road within the meaning of the Roads (Scotland) Act 1984; or
(b)a highway within the meaning of the Highways Act 1980 adjoining such water or such land,”.
23Power of court in trial of one offence to convict of another
If, upon a trial for an offence under—
(a)section 10 of the Tweed Fisheries Amendment Act 1859 (having or selling salmon taken from the River Tweed during annual close time);
(b)section 21 of the Salmon Fisheries (Scotland) Act 1868 (buying or selling salmon in close time);
(c)section 7 of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951 (possessing illegally taken salmon or trout);
(d)section 7A of the said Act of 1951 (possessing illegally taken salmon); or
(e)any rule of law relating to reset; the court is not satisfied that the accused is guilty of the offence charged but is satisfied that he is guilty of another of these offences, it may acquit him of the offence charged but find him guilty of the other offence and he shall then be liable to the same punishment as for that other offence.
24Unauthorised introduction of salmon or salmon eggs into certain waters
(1)A person who intentionally introduces any salmon or salmon eggs into inland waters in a salmon fishery district for which there is a district salmon fishery board shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 2 on the standard scale.
(2)A person shall not be guilty of an offence under this section in respect of an introduction of salmon or salmon eggs into such waters if—
(a)he has the previous written consent of the district salmon fishery board for the salmon fishery district in which these waters are situated; or
(b)the waters constitute or are included in a fish farm within the meaning of the Diseases of Fish Act 1937.
25Fixed engines in the Solway
After section 7 of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951, there shall be inserted the following section— “Fixed engines in the Solway.
7B(1)Any person who, for the purpose of taking or obstructing the free passage of salmon, places or uses an uncertificated fixed engine within the limits of the Solway Firth in Scotland shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 4 on the standard scale.
(2)In subsection (1) above— ' fixed engine' includes any net or other implement for taking fish which is fixed to the soil or made stationary in any other way; and' uncertificated ' means not having been certified as privileged under section 5 of the Solway Salmon Fisheries Commissioners (Scotland) Act 1877.”
26Poaching in the Esk
(1)Section 21 of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951, (non-application of that Act to the River Esk in Scotland) shall be renumbered as subsection (1) of that section and—
(a)at the beginning of that subsection there shall be inserted the words
“Subject to subsection (2) below,”; and
(b)after that subsection there shall be added the following subsection—
“(2)Section 1 of this Act and sections 3 and 18 to 20 so far as relating to an offence under that section shall apply to so much of the River Esk, including its banks and tributary streams, as is situated in Scotland.”.
(2)In section 39 of the Salmon and Freshwater Fisheries Act 1975 (application of that Act to certain Border waters including the River Esk) there shall be inserted after subsection (1) the following subsection—
“(1A)In the application of this Act, under subsection (11(b) above, to the River Esk in Scotland, references to this Act in sections 31 to 33 and section 36 shall be construed as including references to sections 1, 3 and 18 to 20 of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951 as applied to that River by section 21 of that Act.”.
(3)In section 43(3) of the said Act of 1975 (Scottish extent) after the words " 39(1)" there shall be inserted the word
“,(1A)”.
(4)Section 9 of the Solway Act 1804 shall, so far as relating to salmon, cease to have effect in relation to so much of the River Esk, including its banks and tributary streams, as is situated in Scotland.
27Exemption from certain offences in respect of certain acts
(1)A person shall not, in respect of any act or omission relating to fishing for or taking salmon, be guilty of a contravention of an enactment prohibiting or regulating that act or omission if the act or omission has been exempted by the Secretary of State.
(2)The Secretary of State may exempt an act or omission under subsection (1) above only if he is satisfied that—
(a)the proprietor of every affected salmon fishery in the salmon fishery district in which the act or omission is to take place, being a salmon fishery entered in the valuation roll; and
(b)if there is one, the district salmon fishery board for that district have previously consented to it; and, in this subsection, " salmon fishery district " includes the River Tweed and, in relation to that river, " district salmon fishery board " means the River Tweed Council.
(3)In subsection (2) above, " affected " means appearing to the Secretary of State to be likely to be affected by the exemption.
(4)An exemption under this subsection—
(a)may relate only to such person as may be specified in it;
(b)may be subject to such conditions as may be so specified ;
(c)shall be in writing;
(d)shall specify—
(i)the limits of the waters to which it relates ;
(ii)its duration ; and
(iii)the enactment to which it relates.
(5)In this section, " enactment" includes any instrument made after the passing of this Act under any enactment.
28Exemption from certain offences in respect of acts done for scientific etc. purposes
(1)A person shall not, in respect of any act or omission relating to salmon or salmon roe or eggs, be guilty of a contravention of an enactment prohibiting or regulating that act or omission if—
(a)the act or omission is for—
(i)some scientific purpose ;
(ii)the purpose of protecting, improving or developing stocks of fish ; or
(iii)the purpose of conserving any creature or other living thing ; and
(b)he has obtained the previous permission in writing—
(i)if the act or omission is one to which this subparagraph applies, of the district salmon fishery board for the salmon fishery district in which it takes place or of the Secretary of State ; and
(ii)in any other case, of the Secretary of State for the act or omission.
(2)Sub-paragraph (i) of subsection (1)(b) above applies if the act or omission referred to in that sub-paragraph—
(a)takes place in a salmon fishery district for which there is a district salmon fishery board ; and
(b)is a contravention of—
(i)section 45 of the Tweed Fisheries Act 1857 ;
(ii)section 6 of the Tweed Fisheries Amendment Act 1859 ;
(iii)section 18, 19 or 20 of the Salmon Fisheries (Scotland) Act 1868 ; or
(iv)section 2 or 4(c) of the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951.
(3)A permission under subsection (1) above shall specify the act or omission permitted and the enactment to which the permission relates.
(4)In this section—
(a)references to a salmon fishery district and to a district salmon fishery board include respectively references to the River Tweed and to the River Tweed Council:
(b)" enactment" includes any instrument made after the passing of this Act under any enactment.
29Application of sections 27 and 28 to River Esk and River Tweed
(1)Sections 27 and 28 of this Act, as respects any enactment—
(a)which does not apply to so much of the River Esk, including its banks and tributary streams, as is situated in Scotland but otherwise extends to Scotland, shall likewise not apply to that part of that River;
(b)which applies to so much of the River Esk, with its banks and tributary streams up to their source, as is situated in Scotland but otherwise does not extend to Scotland, shall not apply to that part of that River;
(c)which extends to Scotland only but also applies to so much of the River Tweed as is situated outwith Scotland, shall likewise apply to that part of that River.
(2)In this section, " enactment" includes any instrument made after the passing of this Act under any enactment.
30Prosecution of offences under the Act of 1868
(1)Section 30 and sections 38 to 40 of the Salmon Fisheries (Scotland) Act 1868 (prosecution of offences at the instance of the clerk to a district board or of any other person) shall cease to have effect but any proceedings begun before the commencement of this section shall proceed as if this section had not been passed.
(2)A person who commits an offence under section 15 or sections 18 to 24 of that Act may be convicted on the evidence of one witness.
Part III
Provisions Applying to England and Wales

31Dealer licensing in England and Wales
(1)The Minister of Agriculture, Fisheries and Food and the Secretary of State may by order made by statutory instrument make provision for the purpose of prohibiting persons, in such cases as may be specified in the order, from—
(a)dealing in salmon otherwise than under and in accordance with a licence issued in pursuance of the order by such person as may be so specified ; or
(b)buying salmon from a person who is not licensed to deal in salmon.
(2)Without prejudice to the generality of subsection (1) above, an order under this section may—
(a)prescribe the manner and form of an application for a licence to deal in salmon and the sum, or maximum sum, to be paid on the making of such an application;
(b)specify the circumstances in which such an application is to be granted or refused and the conditions that may be incorporated in such a licence ;
(c)authorise the amendment, revocation or suspension of such a licence;
(d)create criminal offences consisting in the contravention of, or failure to comply with, provisions made under this section;
(e)provide for matters to be determined for the purposes of any such provision by a person authorised by any such provision to issue a licence ; and
(f)make provision, whether by applying provisions of the Salmon and Freshwater Fisheries Act 1975 or otherwise, for the purpose of facilitating the enforcement of any provision made under this section.
(3)An order under this section may—
(a)make different provision for different cases ; and
(b)contain such incidental, supplemental and transitional provision as appears to the Minister of Agriculture, Fisheries and Food and the Secretary of State to be necessary or expedient.
(4)Except in the case of an order to which subsection (5) below applies, no order shall be made under this section unless a draft of the order has been laid before, and approved by a resolution of, each House of Parliament.
(5)A statutory instrument containing an order under this section which relates exclusively to the sum, or maximum sum, to be paid on the making of an application for a licence to deal in salmon shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(6)In this section " deal", in relation to salmon, includes selling any quantity of salmon, whether by way of business or otherwise, and acting on behalf of a buyer or seller of salmon.
32Handling salmon in suspicious circumstances
(1)Subject to subsections (3) and (4) below, a person shall be guilty of an offence if, at a time when he believes or it would be reasonable for him to suspect that a relevant offence has at any time been committed in relation to any salmon, he receives the salmon, or undertakes or assists in its retention, removal or disposal by or for the benefit of another person, or if he arranges to do so.
(2)For the purposes of this section an offence is a relevant offence in relation to a salmon if—
(a)it is committed by taking, killing or landing that salmon, either in England and Wales or in Scotland ; or
(b)that salmon is taken, killed or landed, either in England and Wales or in Scotland, in the course of the commission of the offence.
(3)It shall be immaterial for the purposes of subsection (1) above that a person's belief or the grounds for suspicion relate neither specifically to a particular offence that has been committed nor exclusively to a relevant offence or to relevant offences; but it shall be a defence in proceedings for an offence under this section to show that no relevant offence had in fact been committed in relation to the salmon in question.
(4)A person shall not be guilty of an offence under this section in respect of conduct which constitutes a relevant offence in relation to any salmon or in respect of anything done in good faith for purposes connected with the prevention or detection of crime or the investigation or treatment of disease.
(5)A person guilty of an offence under this section shall be liable—
(a)on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum or to both ;
(b)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.
(6)The Salmon and Freshwater Fisheries Act 1975 shall have effect as if—
(a)in section 31(1)(b) and (c) (powers of search of water bailiffs), the references to a fish taken in contravention of that Act included references to a salmon in relation to which a relevant offence has been committed ; and
(b)in sections 33(2) (warrants to enter suspected premises), 36(1) (water bailiffs to be constables for the purpose of enforcing Act) and 39(1) (border rivers) and in paragraph 39(l)(a) of Schedule 3 (prosecution by water authorities) and Part II of Schedule 4 (procedure on prosecutions), the references to that Act included references to this section.
(7)In this section " offence ", in relation to the taking, killing or landing of a salmon either in England and Wales or in Scotland, means an offence under the law applicable to the place where the salmon is taken, killed or landed.
33Placing and use of fixed engines
(1)For subsection (1) of section 6 of the Salmon and Freshwater Fisheries Act 1975 (under which it is an offence to place a fixed engine in any inland or tidal waters or to use an unauthorised fixed engine for specified purposes) there shall be substituted the following subsection—
“(1)Any person who places or uses an unauthorised fixed engine in any inland or tidal waters shall be guilty of an offence”.
(2)In subsection (3) of the said section 6 (definition of unauthorised fixed engine), at the end of paragraph (b) there shall be inserted " ; or
(c)a fixed engine the placing and use of which is authorised by byelaws made by a water authority under this Act or by byelaws made by a local fisheries committee by virtue of section 37(2) of the Salmon Act 1986."
(3)In Part II of Schedule 3 to the said Act of 1975 (byelaws), after paragraph 21 there shall be inserted the following paragraph— “21 A. Authorising the placing and use of fixed engines at such places in the water authority area (not being places within the sea fisheries district of a local fisheries committee), at such times and in such manner as may be prescribed by the byelaws and imposing requirements as to the construction, design, material and dimensions of such engines, including in the case of nets the size of mesh.
34Introduction of fish into fish farms without consent
In section 30 of the Salmon and Freshwater Fisheries Act 1975 (prohibition of introduction of fish into inland waters without the consent of the water authority), at the end there shall be added the words
“or the inland water is one which consists exclusively of, or of part of, a fish farm and which, if it discharges into another inland water, does so only through a conduit constructed or adapted for the purpose. In this section”fish farm " has the same meaning as in the Diseases of Fish Act 1937.".
35Removal of differential penalties under Salmon and Freshwater Fisheries Act 1975
(1)In the Table in Part I of Schedule 4 to the Salmon and Freshwater Fisheries Act 1975 (mode of prosecution and punishment for offences), for the entries relating to sections I and 27 (being entries which make different provision according to whether the offender acted with another and do not provide for imprisonment on summary conviction) there shall be substituted the following entries, respectively—
Provision of Act creating the offence (1)	Description of offence (2)	Mode of prosecution (3)	Punishment (4)
" Section 1	Fishing with certain instruments for salmon, trout or freshwater fish and possessing certain instruments for fishing for such fish.	a Summarily	Three months or the statutory maximum or both.
b On indictment	Two years or a fine or both.
Section 27	Fishing for fish otherwise than under the authority of a licence and possessing an unlicensed instrument with intent to use it for fishing.	a If the instrument in question, or each of the instruments in question, is a rod and line, summarily.	Level 4 on the standard-scale.
b In any other case— i summarily	three months or the statutory maximum or both;
ii on indictment	two years or a fine or both.".
(2)Subsection (1) above shall not affect any proceedings in respect of, or the punishment for, an offence committed before that subsection comes into force.
36Servants and agents authorised by fishing licences
(1)For paragraph 9 of Schedule 2 to the Salmon and Freshwater Fisheries Act 1975 (persons treated as servants and agents of licensee for the purpose of being entitled to use an instrument under the authority of the licence) there shall be substituted the following paragraph—
“9(1)A person who uses an instrument of any description for fishing in an area in relation to which an order under section 26 above limiting the number of licences for fishing with instruments of that description is in force shall not be treated for the purposes of section 25(3) above as the duly authorised servant or agent of any holder of a licence to use an instrument of that description unless, at the time that person uses the instrument—
(a)his name and address are entered on the licence in accordance with the following provisions of this Schedule; and
(b)he is not himself the holder of a licence to use an instrument of that description in that area ; and
(c)he is accompanied by the licensee or has the consent of the water authority to his use of the instrument in the absence of the licensee.
(2)A person who uses an instrument of any description for fishing in an area in which no such order as is mentioned in sub-paragraph (1) above is in force shall not be treated for the purposes of section 25(3) above as the duly authorised servant or agent of any holder of a licence to use an instrument of that description unless, at the time that person uses the instrument—
(a)his name and address are entered on the licence in accordance with the following provisions of this Schedule; or
(b)he is accompanied by the licensee; or
(c)he has the consent of the water authority to his use of the instrument otherwise than where there is compliance with paragraph (a) or (b) above.
(3)The consent of a water authority shall not be given under this paragraph except—
(a)in the case of a consent for the purposes of subparagraph (1) (c) above, in relation to a period which appears to the water authority to be a period throughout which the licensee will be unable through illness or injury to accompany his servant or agent;
(b)in the case of a consent for the purposes of subparagraph (2)(c) above, where the giving of the consent appears to the water authority to be required by the special circumstances of the case.”
(2)Accordingly, in section 25(3) of that Act, for the words from "not exceeding" onwards there shall be substituted the words
“subject to the provisions of paragraphs 9 to 13 of Schedule 2 to this Act”.
37Byelaws under Sea Fisheries Regulation Act 1966
(1)Subject to subsection (3) below, the power of a local fisheries committee to make byelaws under section 5 of the Sea Fisheries Regulation Act 1966 shall be exercisable for the purposes of protecting salmon and of preventing any interference with their migration and shall be so exercisable as if the references in that section to sea fish included references to salmon.
(2)Subject to subsection (3) below, the power of a local fisheries committee to make byelaws under the said section 5 shall also include power to make byelaws which for the purposes of section 6 of the Salmon and Freshwater Fisheries Act 1975 authorise the placing and use of fixed engines at such places in their sea fisheries district, at such times and in such manner as may be prescribed by the byelaws and impose requirements as to the construction, design, material and dimensions of such engines, including in the case of nets the size of mesh.
(3)A local fisheries committee shall not make byelaws for any purpose mentioned in subsection (1) or (2) above unless the water authority whose area for the purposes of functions relating to fisheries includes the whole or any part of the committee's sea fisheries district have consented to byelaws being made by the committee for that purpose.
(4)For the purposes of any byelaws made by virtue of this section the references to sea fish in sections 10(2)(c) and 12 of the said Act of 1966 (which include provision with respect to the seizure of, and searches for, sea fish taken in contravention of byelaws) shall be deemed to include references to salmon.
(5)In this section—
" fixed engine " has the same meaning as in the Salmon and Freshwater Fisheries Act 1975 ; and
" salmon" means fish of the salmon species and trout which migrate to and from the sea.
38Disclosure of information furnished under the Diseases of Fish Act 1983
In subsection (1) of section 9 of the Diseases of Fish Act 1983 (disclosure of information obtained in pursuance of section 7 of that Act), after paragraph (c) there shall be inserted the words " or
(d)for the purpose of enabling a water authority to carry out any of their functions under the 1937 Act".
Part IV
Miscellaneous

39Review of certain salmon net fishing
(1)The Minister of Agriculture, Fisheries and Food and the Secretary of State shall, as soon as practicable after the end of the period of three years beginning with the passing of this Act, prepare a report which, in the context of the need to ensure—
(a)that sufficient salmon return to spawn in the rivers wholly or partly situated in the areas and districts specified in subsection (3) below; and
(b)that fishing for salmon by means of nets is properly managed in those areas and districts, reviews the nature and extent of all such fishing in those areas and districts.
(2)A copy of the report prepared under subsection (1) above shall be laid before each House of Parliament.
(3)The areas and districts referred to in subsection (1) above are the areas of the Yorkshire and Northumbrian water authorities and the salmon fishery districts from the River Forth to the River Ugie, the River Tweed being deemed for the purposes of this section to be included in those areas and districts.
40Interpretation
(1)In this Act, unless the context otherwise requires—
" annual close time order " has the meaning ascribed to it in section 6 (3) of this Act;
" assessor " means the assessor or depute assessor for a valuation area appointed under section 116 of the Local Government (Scotland) Act 1973 ;
" board " and " district salmon fishery board " mean—
(a)the committee of an association of proprietors of salmon fisheries within the meaning of section 14 of this Act; or
(b)a transitional district board within the meaning of section 14(8) of this Act;
" coastal limits " means the limits of seacoast fixed for a district under section 6(3) of the Salmon Fisheries person, company or corporation ;
" designation order" has the meaning ascribed to it in section 1(2) of this Act;
" district" and " salmon fishery district" mean an area described in section 1(1) of this Act or designated as such by a designation order ;
" enactment" includes any Act of Parliament, whether public, general, local or private, and any instrument made under any enactment;
"fishery assessment" has the meaning ascribed to it in section 15(2) of this Act;
" fishery " and " salmon fishery " means a salmon fishery in any river or estuary or in the sea ;
" inland waters " has the same meaning as in the Salmon and Freshwater Fisheries (Protection) (Scotland) Act 1951;
" proprietor " means, subject to subsection (3) below, any person, partnership, company or corporation which is the proprietor of a salmon fishery or which receives or is entitled to receive the rents of such fishery on its own account or as trustee, guardian or factor for any Tweed Fisheries Amendment Act 1859, as amended by
" river " includes tributaries and any loch from or through which any river flows ;
" River Tweed " means " the River " as defined by the the byelaw made under section 4 of the Salmon Fisher-the byelaw made under section 4 of the Salmon Fisheries (Scotland) Act 1863 ;
" River Tweed Council" means the council constituted under section 6 of the Tweed Fisheries Act 1969:
" salmon " means all migratory fish of the species Salmo salar and Salmo trutta and commonly known as salmon and sea trout respectively or any part of any such fish;
" tenant netsman " means a person in possession of a right, under a lease or sub-lease, of fishing for salmon with nets: and
" valuation roll" means a roll made up under section 1 of the Local Government (Scotland) Act 1975.
(2)In Part I of this Act, " the Salmon Fisheries (Scotland) Acts 1862 to 1868 " means—the Salmon Fisheries (Scotland) Act 1862 ;
the Salmon Fisheries (Scotland) Act 1864 ;
and the Salmon Fisheries (Scotland) Act 1868.
(3)In this Act, " proprietor " includes not more than one person authorised by—
(a)in the case of a fishery in which more than one person has a pro indiviso share, such persons; or
(b)in the case of a fishery in which the rights to that fishery are shared by more than one person in any other way, such persons, but in neither case does it include, except by virtue of this subsection, a person whose right to that fishery is so shared.
41Amendments and repeals
(1)The enactments mentioned in Schedule 4 to this Act shall have effect subject to the amendments there specified (being minor amendments or amendments consequential on the preceding provisions of this Act).
(2)Subject to subsections (3) and (4) below, the enactments mentioned in Schedule 5 to this Act are hereby repealed to the extent specified in the third column of that Schedule.
(3)The repeal specified in Schedule 5 to this Act relating to section 13 of the Salmon Fisheries (Scotland) Act 1868 shall not extend to the River Tweed.
(4)Notwithstanding the repeal specified in Schedule 5 to this Act relating to the Salmon Fisheries (Scotland) Act 1863, the byelaw made under section 4 of that Act in respect of the limits of the River Tweed shall continue to have effect; and the repeal of that section shall not affect the legality of any mode of fishing for or taking salmon at any place.
42Crown application
(1)Part I of this Act shall apply to land an interest in which belongs to Her Majesty in right of the Crown and land an interest in which belongs to a government department or is held in trust for Her Majesty for the purposes of a government department, but otherwise this Act shall not bind the Crown.
(2)In this section, " land " includes salmon fisheries.
43Citation, commencement and extent
(1)This Act, which may be cited as the Salmon Act 1986, shall, with the exception of the provision mentioned in subsection (2) below, come into force on the expiry of the period of two months beginning with the date on which it is passed.
(2)Section 21 of this Act shall come into force on such date as the Secretary of State may by order made by statutory instrument appoint, and such an order may include such transitional or saving provisions as appear to the Secretary of State to be necessary or expedient in connection with the provision brought into force by the order.
(3)The provisions of this Act modifying or repealing other enactments except section 38 have respectively the same extent as those other enactments.
(4)Subject to the application of section 39(1) of the Salmon and Freshwater Fisheries Act 1975 (border rivers) in relation to section 32 of this Act and the enactments amended by sections 33 to 36 of this Act, sections 31 to 38 of this Act extend to England and Wales only.
(5)Except as this Act otherwise provides, Parts I and II and section 42 of this Act extend to Scotland only.

###

Introductory

1Instruments of government and articles of government
(1)For every county, voluntary and maintained special school there shall be—
(a)an instrument providing for the constitution of a governing body of the school (to be known as the instrument of government); and
(b)an instrument in accordance with which the school is to be conducted (to be known as the articles of government).
(2)The instrument of government and articles of government shall be made by order of the local education authority.
(3)The instrument of government shall contain such provisions as are required either by Part II of this Act (which is concerned, among other things, with the size and composition of governing bodies and the procedures for electing members and filling vacancies) or by any other enactment.
(4)The articles of government shall contain such provisions as are required either by Part III of this Act (which is concerned, among other things, with the manner in which schools are to be conducted and the allocation of functions between the local education authority, the governing body and the head teacher) or by any other enactment.
(5)The instrument of government and articles of government shall—
(a)contain no provision which is inconsistent with any provision made by or under this Act or any other enactment ; and
(b)comply with any trust deed relating to the school.
(6)This section is subject to the following provisions of this Act—
(a)section 9 (which provides for two or more schools to be grouped under a single governing body in certain circumstances) ; and
(b)section 12 (which provides for certain existing, or proposed, schools to have temporary governing bodies pending the constitution of governing bodies under instruments of government).
2Procedure in relation to making etc. of instruments and articles
(1)Before making any order under section 1 of this Act, a local education authority shall consult the governing body and the head teacher of the school concerned.
(2)Before making any such order in respect of a voluntary school, a local education authority shall—
(a)secure the agreement of the governing body to the terms of the proposed order ;
(b)if it embodies or varies an instrument of government, secure the agreement of the foundation governors to any provisions which are of particular concern to those governors; and
(c)have regard to the way in which the school has been conducted.
(3)Where the governing body of any county, voluntary or maintained special school make a proposal to the local education authority for the alteration of the provision made by the instrument of government, or articles of government, for the school, it shall be the duty of the authority to consider their proposal.
(4)Where—
(a)the foundation governors of a voluntary school make a proposal to the local education authority for the alteration of the provision made by the instrument of government for the school; and
(b)the proposal relates solely to one or more matters which are of particular concern to those governors; it shall be the duty of the authority to consider their proposal.
(5)Where a local education authority—
(a)propose to make an order under section 1 but cannot secure any agreement required by subsection (2) above ; or
(b)refuse, in the case of a voluntary school, to make such an order in response to a proposal of a kind mentioned in subsection (3) or (4) above; the authority or (as the case may be) the governing body or foundation governors may refer the matter to the Secretary of State.
(6)On any reference to him under subsection (5) above, the Secretary of State shall give such direction as he thinks fit having regard, in particular, to the status of the school as a controlled, aided or (as the case may be) special agreement school.
(7)Where it appears to the Secretary of State—
(a)that an order, or proposed order, under section 1 is in any respect inconsistent with the provisions of any trust deed relating to the school; and
(b)that it is expedient in the interests of the school that the provisions of the trust deed should be modified for the purpose of removing the inconsistency ; he may by order make such modifications in the trust deed as appear to him to be just and expedient for that purpose.
Part II
School Government

Governing bodies

3Governing bodies for county, controlled and maintained special schools
— (1) This section applies in relation to any county, controlled or maintained special school.
(2)The instrument of government for such a school which has less than 100 registered pupils shall, subject to section 7 of this Act, provide for the governing body to consist of the following (and no others)—
(a)two parent governors ;
(b)two governors appointed by the local education authority ;
(c)one teacher governor;
(d)the head teacher, unless he chooses not to be a governor ; and
(e)either—
(i)two foundation governors and one co-opted governor, in the case of a controlled school; or
(ii)three co-opted governors, in any other case.
(3)The instrument of government for such a school which has more than 99, but less than 300, registered pupils shall, subject to section 7, provide for the governing body to consist of the following (and no others)—
(a)three parent governors ;
(b)three governors appointed by the local education authority;
(c)one teacher governor;
(d)the head teacher, unless he chooses not to be a governor ; and
(e)either—
(i)three foundation governors and one co-opted governor, in the case of a controlled school; or
(ii)four co-opted governors, in any other case.
(4)The instrument of government for such a school which has more than 299, but less than 600, registered pupils shall, subject to section 7, provide for the governing body to consist of the following (and no others)—
(a)four parent governors ;
(b)four governors appointed by the local education authority;
(c)two teacher governors ;
(d)the head teacher, unless he chooses not to be a governor; and
(e)either—
(i)four foundation governors and one co-opted governor, in the case of a controlled school; or
(ii)five co-opted governors, in any other case.
(5)The instrument of government for such a school which has more than 599 registered pupils shall, subject to section 7, provide for the governing body to consist of the following (and no others)—
(a)five parent governors;
(b)five governors appointed by the local education authority ;
(c)two teacher governors ;
(d)the head teacher, unless he chooses not to be a governor ; and
(e)either—
(i)four foundation governors and two co-opted governors, in the case of a controlled school; or
(ii)six co-opted governors, in any other case.
(6)Where the instrument of government so provides, a school to which subsection (5) above would otherwise apply shall be treated for the purposes of this section as one to which subsection (4) above applies.
(7)Where the head teacher is a governor he shall be treated for all purposes as being an ex officio governor.
4Governing bodies for aided and special agreement schools
(1)This section applies in relation to any aided or special agreement school.
(2)The instrument of government for such a school shall provide for the governing body to include—
(a)at least one governor appointed by the local education authority;
(b)in the case of a school which is a primary school serving an area in which there is a minor authority, at least one governor appointed by the authority ;
(c)foundation governors;
(d)at least one parent governor ;
(e)in the case of a school which has less than 300 registered pupils, at least one teacher governor;
(f)in the case of a school which has 300 or more registered pupils, at least two teacher governors ; and
(g)the head teacher, unless he chooses not to be a governor.
(3)The instrument of government for such a school shall provide—
(a)for such number of foundation governors as will lead to their outnumbering the other governors—
(i)by two, if the governing body of the school will consist of eighteen or fewer governors ; and
(ii)by three, if it will consist of more than eighteen governors; and
(b)for at least one of the foundation governors to be (at the time of his appointment) a parent of a registered pupil at the school.
(4)Where the head teacher of such a school has chosen not to be a governor, he shall nevertheless be counted as one for the purposes of calculating the required number of foundation governors.
(5)Subject to subsection (3) above, nothing in this section shall be taken to prevent the instrument of government for such a school from providing for the governing body to include governors in addition to those required by virtue of this section.
(6)Where the head teacher is a governor he shall be treated for all purposes as being an ex officio governor.
Governors

5Appointment of parent governors by governing body
(1)The instrument of government for any county or controlled school, or for any maintained special school which is not established in a hospital, may provide that if at the time when the instrument is made, or at any later time when there is a vacancy for a parent governor—
(a)at least fifty per cent, of the registered pupils at the school are boarders ; and
(b)it would, in the opinion of the local education authority, be impracticable for there to be an election of parent governors; the parent governors, or (as the case may be) the parent governor required to fill that vacancy, shall be appointed by the other members of the governing body.
(2)The instrument of government for every county, controlled and maintained special school at which parent governors are to be, or may be, elected shall provide for the required number of parent governors to be made up by parent governors appointed by the other members of the governing body if—
(a)one or more vacancies for parent governors are required to be filled by election ; and
(b)the number of parents standing for election as parent governors is less than the number of vacancies.
(3)Where, in the opinion of the local education authority, it is likely to be impracticable for there to be elections of parent governors at any maintained special school which is established in a hospital, the instrument of government for that school may provide for the parent governors to be appointed by the other members of the governing body.
(4)The instrument of government for any school to which this section applies shall provide for it to be the duty of governors —
(a)in appointing any parent governor under any provision made by virtue of this section—
(i)to appoint a person who is the parent of a registered pupil at the school, where it is reasonably practicable to do so ; and
(ii)where it is not, to appoint a person who is the parent of one or more children of compulsory school age;
(b)not to appoint any person as a parent governor, under any such provision, if that person is—
(i)an elected member of the local education authority ;
(ii)an employee of the authority or of the governing body of any aided school maintained by the authority ; or
(iii)a co-opted member of any education committee of the authority.
6Connection with local business community
The instrument of government for any county, controlled or maintained special school shall provide for it to be the duty of the governors concerned, in co-opting any person to be a member of the governing body (otherwise than as a foundation governor)—
(a)to have regard—
(i)to the extent to which they and the other governors are members of the local business community; and
(ii)to any representations made to the governing body as to the desirability of increasing the connection between the governing body and that community ; and
(b)where it appears to them that no governor of the school is a member of the local business community, or that it is desirable to increase the number of governors who are, to co-opt a person who appears to them to be a member of that community.
7Appointment of representative governors in place of co-opted governors
(1)The instrument of government for every primary school which is a county or controlled school serving an area in which there is a minor authority shall provide for one governor to be appointed by that authority.
(2)The instrument of government for every maintained special school which is established in a hospital shall provide for one governor to be appointed by the district health authority.
(3)The instrument of government for every maintained special school (other than one established in a hospital) shall, if the school has less than 100 registered pupils, provide for one governor to be appointed—
(a)by a voluntary organisation designated by the local education authority, in relation to the school, as the appropriate voluntary organisation concerned with matters in respect of which the school is specially organised; or
(b)jointly by two or more voluntary organisations so designated ; and shall, if it has more than 99 registered pupils, provide for two governors to be so appointed.
(4)Where, by virtue of subsection (3) above, an instrument of government is required to provide for the appointment of two governors, it may make different provision in relation to the appointment of one governor to that made in relation to the appointment of the other.
(5)Where a local education authority are satisfied, in relation to any special school, that there is no voluntary organisation which it would be appropriate to designate for the purposes of subsection (3) above, that subsection shall not apply to its instrument of government.
(6)Where the instrument of government for any school is required by this section to provide for the appointment of any governor, the instrument—
(a)shall name the person or persons by whom the governor is to be appointed ;
(b)shall not provide for a co-opted governor if the school is a controlled school with less than 600 registered pupils or is treated as such a school for the purposes of section 3 of this Act by virtue of subsection (6) of that section ; and
(c)in any other case, shall provide for one or (as the case may be) two fewer co-opted governors than would otherwise be provided for.
(7)In subsection (6) above, references to co-opted governors are to governors required to be co-opted by virtue of section 3 of this Act and do not include references to co-opted foundation governors.
8Governors' proceedings and tenure of office
(1)The proceedings of the governing body of any county, voluntary or maintained special school shall not be invalidated by
(a)any vacancy among their number ; or
(b)any defect in the election or appointment of any governor.
(2)The instrument of government for every county, controlled and maintained special school shall provide for each governor, other than one who is an ex officio governor, to hold office for a term of four years.
(3)Subsection (2) above shall not be taken to prevent a governor from being elected or appointed for a further term, or from being disqualified, by virtue of regulations made under subsection (6) below, for continuing to hold office.
(4)Any governor of a county, voluntary or maintained special school may at any time resign his office.
(5)Any foundation governor of a voluntary school, or governor of a county, voluntary or maintained special school appointed otherwise than by being co-opted, may be removed from office by the person or persons who appointed him. For the purposes of this subsection, a governor appointed in accordance with any provision made by virtue of section 5 of this Act shall be treated as having been co-opted.
(6)The Secretary of State may by regulations make provision as to the meetings and proceedings of the governing bodies of county, voluntary and maintained special schools (including provision modifying that made by subsection (1) above) and the circumstances in which persons are to be disqualified for holding office as governors of such schools.
(7)The regulations may, in particular, provide—
(a)for the election by the governors of any such school of one of their number to be chairman, and one to be vice-chairman, of the school's governing body for such period as may be prescribed;
(b)for the chairman of the governing body of any such school, or such other member of that body as may be prescribed, to have power in prescribed circumstances to discharge any of the functions of that body as a matter of urgency ; and
(c)as to the quorum required for the purposes of making appointments in accordance with any provision made by virtue of section 5 of this Act or when business is transacted by governors of a particular category.
(8)The minutes of the proceedings of the governing body of any county, voluntary or maintained special school shall be open to inspection by the local education authority.
(9)The instrument of government for every county, voluntary and maintained special school may make provision with respect to the matters mentioned in subsections (6) and (7) above.
(10)Any provision made by the instrument of government for any such school which relates to a matter dealt with by regulations under subsection (6) above (including any provision made by virtue of subsection (2) above) shall have effect subject to the regulations.
(11)No decision of a kind mentioned in subsection (12) below which is taken at a meeting of the governing body of any aided or special agreement school shall have effect unless it is confirmed at a second meeting of the governing body held not less than twenty-eight days after the first.
(12)The decisions are
(a)any decision that would result in the submission of proposals under section 13 of the 1980 Act (establishment and alteration of voluntary schools);
(b)any decision to serve a notice under section 14(1) of the 1944 Act (discontinuance of school);
(c)any decision that would result in an application under section 15(4) of the 1944 Act (revocation of order whereby school is an aided or special agreement school);
(d)any decision to request the making of an order under subsection (2) of section 16 of the 1944 Act (discontinuance of school for which another school is substituted) or as to the submissions to be made to the Secretary of State in any consultations under subsection (3) of that section ;
(e)any decision to make an agreement under Schedule 2 to the 1944 Act (agreement for transfer ol interest in school to local education authority).
Grouping of schools

9Grouping of schools under single governing body
(1)Subject to the requirements as to consent imposed by section 10 of this Act, a local education authority may resolve that any two or more schools maintained by them shall be grouped for the purposes of this Part of this Act.
(2)Where any schools are so grouped, they shall (subject to the following provisions of this section)—
(a)be treated for the purposes of this Part as a single school; and
(b)have a single governing body constituted under a single instrument of government.
(3)For the purposes of this Part of this Act, a group shall be treated—
(a)as an aided school, if it contains at least one such school;
(b)as a special agreement school, if it contains at least one such school and paragraph (a) above does not apply;
(c)as a controlled school, if it contains at least one such school and neither paragraph (a) nor paragraph (b) above applies;
(d)as a maintained special school, if it consists only of such schools; and
(e)as a county school, if none of the preceding paragraphs apply.
(4)Where any proposal or alteration of a kind mentioned in subsection (5) below relates to any school which is grouped with one or more other schools under this section, it shall be the duty of the local education authority—
(a)to review the grouping of those schools and to consider whether or not it should be brought to an end; and
(b)where the Secretary of State's consent to the grouping, or continued grouping, was at any time required by section 10 of this Act and the authority consider that the grouping should be continued—
(i)to report to him on the results of their review; and
(ii)to provide him with such information as he may reasonably require with a view to enabling him to consider whether or not the grouping should be brought to an end.
(5)The proposals and alterations referred to in subsection (4) above are—
(a)any proposal under—
(i)section 16 of the 1944 Act (transfer of schools to new sites and substitution of new for old schools);
(ii)sections 12 to 15 of the 1980 Act (establishment, discontinuance and alteration of schools); or
(iii)section 54 of this Act;
(b)any alteration made to arrangements approved by the Secretary of State in accordance with regulations made under section 12 of the 1981 Act (approval of special schools); and
(c)any alteration in the status of an aided or special agreement school effected by an order of the Secretary of State under section 15(4) of the 1944 Act (revocation of order by virtue of which school is an aided or special agreement school).
(6)The Secretary of State may by order bring to an end any grouping under this section in respect of which his consent was at any time required by section 10 of this Act.
(7)Any grouping under this section may also be brought to an end—
(a)if the group does not include any voluntary school, by resolution of the local education authority; and
(b)if it does include any such school—
(i)by resolution of the authority made with the agreement of the school's governing body ; or
(ii)by one year's notice given either by the authority to the governing body or by the governing body to the authority.
(8)Any order under section 1 of this Act embodying an instrument of government for two or more schools which are grouped under this section shall be deemed to have been revoked—
(a)in the case of a group which was established for a specified period, at the end of that period ; or
(b)on the bringing to an end of the group in accordance with subsection (6) or (7) above.
(9)Schedule 1 to this Act shall have effect for the purpose of making further provision in relation to schools grouped under this section.
10Requirements as to consent to grouping
(1)Before resolving to group any schools under section 9 of this Act, a local education authority shall obtain the consent of the Secretary of State to the proposed grouping unless—
(a)the group will consist only of two primary schools both of which serve substantially the same area;
(b)neither of the schools is a special school; and
(c)where they are in Wales, there is no significant difference between them in their use of the Welsh language.
(2)The Secretary of State's consent may be given subject to such conditions as he sees fit to impose with respect to the duration of the grouping to which his consent is given.
(3)Where two primary schools have been grouped under section 9 in circumstances in which the Secretary of State's consent was not required under subsection (1) above, his consent to their continuing to be so grouped shall be required if a change of circumstances occurs such that a proposal to group those schools under section 9 made after that change would require his consent under that subsection.
(4)Where the Secretary of State's consent is required to the grouping or continued grouping of any schools under section 9, sections 3 to 7 of this Act shall apply in relation to the group subject to such modifications (if any) as he may direct.
(5)No local education authority may pass a resolution under section 9 applying to any voluntary school without first obtaining the consent of its governing body.
(6)No local education authority may pass a resolution under section 9 applying to any county or maintained special school without first consulting its governing body.
(7)Any dispute as to whether, for the purposes of this section—
(a)two primary schools are to be regarded as serving substantially the same area ; or
(b)there is any significant difference between two primary schools in their use of the Welsh language ; shall be determined by the Secretary of State.
Reviews

11Review of constitution of governing bodies of county, controlled and maintained special schools
(1)The constitution of the governing body of every county, controlled and maintained special school shall be reviewed in accordance with the provisions of this section on, or as soon as is reasonably practicable after, the occurrence of any event which is a relevant event in relation to the school.
(2)In this section " relevant event ", in relation to any school, means any of the following—
(a)the implementation of any proposal under—
(i)section 16(1) of the 1944 Act (transfer of schools to new sites);
(ii)section 12(1) (d) of the 1980 Act (alteration of county schools); or
(iii)section 13(1)(b) of the 1980 Act (alteration of voluntary schools); which provides for an increase in the number of registered pupils at the school;
(b)in the case of a maintained special school, the implementation of any proposal to change approved arrangements which provides for an increase in the number of registered pupils at the school;
(c)where no relevant event of a kind mentioned in paragraph (a) or (b) above has occurred in relation to the school before the fourth anniversary of the date on which the current instrument of government for the school was made, that anniversary ;
(d)where any relevant event has previously occurred in relation to the school, the fourth anniversary of the latest such event.
(3)Any review which is required by virtue of the occurrence of a relevant event of a kind mentioned in paragraph (a)(i), (ii) or (b) of subsection (2) above shall be carried out by the local education authority and any other review which is required by this section shall be carried out by the governing body.
(4)Whenever the local education authority or governing body of a school are required to carry out a review under this section they shall consider whether—
(a)the governing body are properly constituted ;
(b)the provision made by the instrument of government for the school is in any respect different from that which a new instrument of government would be required to make.
(5)Where the governing body of a school have carried out a review under this section and have established that the provision made by the instrument of government for the school is in one or more respects different from that which a new instrument of government for the school would be required to make, they shall report the fact to the local education authority.
(6)Where a relevant event of a kind mentioned in paragraph (a)(i), (ii) or (b) of subsection (2) above has occurred in relation to any school, the local education authority shall determine the date on which, for the purposes of this section, that event is to be taken to have occurred, and shall notify the governing body accordingly.
(7)In this section " approved arrangements " means arrangements approved by the Secretary of State in accordance with regulations made under section 12 of the 1981 Act (approval of special schools).
Temporary governing bodies

12Temporary governing bodies for new schools
(1)Where—
(a)the Secretary of State has approved, under section 12 or 13 of the 1980 Act, any proposal of a kind mentioned in subsection (2) below ; or
(b)a local education authority making any such proposal have determined, under section 12(7) of that Act, that it should be implemented ; the local education authority shall make an arrangement for the constitution of a temporary governing body for the school (or proposed school) pending the constitution of its governing body under an instrument of government.
(2)The proposals referred to in subsection (1) above are—
(a)any proposal made by a local education authority—
(i)to establish a new county school; or
(ii)to maintain as a county school any school which is neither a county school nor a voluntary school; and
(b)any proposal that a relevant school should be maintained by a local education authority as a voluntary school.
(3)Where a local education authority propose to establish a new special school, they shall make an arrangement for the constitution of a temporary governing body for the school—
(a)at least one year before the date on which the first pupils are expected to be admitted ; or
(b)on the day on which their resolution to establish the school is passed.
(4)Where a proposal of a kind mentioned in subsection (2) above has been duly published, the local education authority may make an arrangement for the constitution of a temporary governing body in anticipation of the approval of the proposal by the Secretary of State or (as the case may be) of the determination by the authority that it should be implemented.
(5)Where any proposal that a relevant school should be maintained by a local education authority as a controlled school has been duly published, the authority shall consult the promoters—
(a)as to whether the power given to the authority by subsection (4) above should be exercised ; and
(b)if the authority propose to exercise it, as to the date on which it should be exercised.
(6)Where any proposal that a relevant school should be maintained by a local education authority as an aided school has been duly published, the authority and the promoters shall consider—
(a)whether the power given to the authority by subsection (4) above should be exercised ; and
(b)where they agree that it should, on what date the authority should exercise it.
(7)Where, in a case falling within subsection (6) above, the authority and the promoters fail to agree on the question mentioned in paragraph (a) or on that mentioned in paragraph (b), either of them may refer the matter to the Secretary of State.
(8)On any reference under subsection (7) above, the Secretary of State shall give such direction as he thinks fit.
(9)In this section " relevant school", in relation to any proposal, means a school which—
(a)was established by those making the proposal, or by persons whom they represent, and which is not a voluntary school; or
(b)is proposed to be so established.
(10)Schedule 2 to this Act shall have effect for the purpose of supplementing this section.
Miscellaneous and supplemental

13Effect of change of circumstances on instrument of government
(1)Any instrument of government to which this Act applies shall (subject to subsection (2) below and paragraph 3(2) of Schedule 2 to this Act) make such provision as is appropriate having regard to all the circumstances of the school as at the date on which the instrument is made.
(2)Where a proposal of a kind mentioned in section l1(2)(a) or (b) of this Act has been implemented in relation to any school, the number of registered pupils at the school shall, for the purposes of subsection (1) above and until the number of registered pupils at the school reaches the maximum number of pupils provided for by the proposal, be deemed to be that maximum number.
(3)Where subsection (2) applies in relation to any school, the local education authority or (in the case of a proposal under section 13(1)(b) of the 1980 Act) the governing body may determine that it shall cease to apply (but without prejudice to its operation in relation to the implementation of any further proposal).
(4)Where the effect of any subsequent change in the circumstances of a school is that the provision made by the instrument of government for the school differs in any respect from the provision which a new instrument of government would be required to make, it shall be the duty of the local education authority (subject to subsection (7) below): —
(a)to vary the instrument of government in such manner as is required to remove any such difference ; or
(b)to make a new instrument of government.
(5)Any instrument of government to which this Act applies may make provision which would be appropriate in the event of such a change in the circumstances of the school as is anticipated by that provision (including in particular a change in the number of registered pupils at the school).
(6)No provision made by any such instrument in anticipation of a change in the number of registered pupils at the school shall have effect before it is established, by a review under section 11 of this Act, that a new instrument of government for the school in question would be required to make that provision.
(7)For the purposes of subsection (4) above, any change in the number of registered pupils at a school occurring after the instrument of government for the school is made, or (as the case may be) varied, may be disregarded until a review under section 11 of this Act establishes that the provision made by the instrument differs in any respect from the provision which a new instrument of government for the school would be required to make.
(8)Where subsection (2) above has applied in relation to any school but the local education authority or (as the case may be) governing body have subsequently determined that it should cease to apply, subsections (4) and (7) above shall have effect as if a change in the number of registered pupils at the school had occurred at the time when that determination was made.
(9)Subsections (6) and (7) above do not apply to aided or special agreement schools.
14Adjustment in number of governors
(1)Where
(a)any county, controlled or maintained special school has more governors of a particular category than are provided for by the instrument of government for the school; and
(b)the excess is not eliminated by the required number of governors of that category resigning; such number of governors of that category as is required to eliminate the excess shall cease to hold office.
(2)The governors who are to cease to hold office shall be selected on the basis of seniority, the longest serving governor being the first to be selected, and so on.
(3)Where it is necessary for the purpose of subsection (2) above to select one or more governors from a group of equal seniority, it shall be done by drawing lots.
(4)Subsections (2) and (3) above do not apply in relation to foundation governors.
(5)The instrument of government for every controlled school shall make provision for the procedure to be adopted whenever subsection (1) above requires any foundation governor to cease to hold office.
15Miscellaneous
(1)Where a school to which section 3 or 4 of this Act applies has more than one head teacher (whether or not as a result of two or more schools being grouped under section 9 of this Act), each of them shall be a governor unless he chooses not to be.
(2)It shall be for the local education authority, in the case of a county, controlled or maintained special school, and for the governing body, in the case of an aided or special agreement school—
(a)to determine, for the purposes of an election of parent governors or teacher governors to the governing body, any question whether a person is—
(i)a parent of a registered pupil at the school; or
(ii)a teacher at the school; and
(b)to make all necessary arrangements for, and to determine all other matters relating to, any such election.
(3)The power conferred by subsection (2)(b) above includes power to make provision as to qualifying dates but does not include power to impose any requirement as to the minimum number of votes required to be cast for a candidate to be elected.
(4)Any such election which is contested must be held by secret ballot.
(5)The arrangements made under subsection (2)(b) above shall, in the case of any election of a parent governor, provide for every person who is entitled to vote in the election to have an opportunity to do so by post or, if he so prefers, by having his ballot paper returned to the school by a registered pupil at the school.
(6)Where a vacancy for a parent governor of any county, voluntary or maintained special school is required to be filled by election, it shall be the duty of the appropriate authority to take such steps as are reasonably practicable to secure that every person who is known to them to be a parent of a registered pupil at the school is—
(a)informed of the vacancy and that it is required to be filled by election;
(b)informed that he is entitled to stand as a candidate, and vote, at the election; and (c) given an opportunity to do so.
(7)The instrument of government for every voluntary school shall name the person or persons (if any) who are entitled to appoint any foundation governor.
(8)The instrument of government for any voluntary school may provide for any foundation governorship to be held ex officio by the holder of an office named in the instrument.
(9)The qualification of any person for election or appointment as a governor, of a particular category, of any county, voluntary or maintained special school, shall not have the effect of disqualifying him for election or appointment as a governor, of any other category, of that school.
(10)No person shall at any time hold more than one governorship of the same county, voluntary or maintained special school.
(11)Where the instrument of government for any county, voluntary or maintained special school provides for one or more governors to be appointed by persons acting jointly, any such appointment shall be made, in the event of failure on the part of those persons to make an agreed appointment—
(a)by the Secretary of State ; or
(b)in accordance with any direction given by him.
(12)No instrument of government for any county, voluntary or maintained special school which provides for one or more persons to be co-opted, by governors, as members of the governing body of the school shall make any provision (otherwise than by virtue of section 6 of this Act) which has the effect of restricting those governors in their choice of person to co-opt.
(13)In subsection (12) above, references to co-opted governors are to governors required to be co-opted by virtue of section 3 of this Act and do not include references to co-opted foundation governors.
(14)No person shall be qualified for membership of the governing body of any county, voluntary or maintained special school unless he is aged eighteen or over, at the date of his election or appointment.
(15)In subsection (6) above, " appropriate authority " means—
(a)the local education authority, in the case of a county, controlled or maintained special school; and
(b)the governing body, in the case of an aided or special agreement school.
Part III
Organisation and Functions

General

16General responsibility for conduct of certain schools
(1)The articles of government for every county, voluntary and maintained special school shall provide for the conduct of the school to be under the direction of the governing body, but subject to any provision of the articles conferring specific functions on any person other than the governing body, and to the provision made (otherwise than in the articles) by or under this Act or any other enactment.
(2)The Secretary of State may by regulations make provision as to the circumstances in which, in any case where—
(a)any provision of, or made under, this Act requires the governing body of a school to be consulted before a particular step is taken by the local education authority or the head teacher ; and
(b)the authority or head teacher require to take that step as a matter of urgency but are unable to contact the chairman or vice-chairman of the governing body ; the authority or (as the case may be) the head teacher may proceed without consulting the governing body.
(3)Where a county, voluntary or maintained special school is organised in two or more separate departments, each with a head teacher, any provision made by or under this Act which confers functions on, or in relation to, the head teacher of the school shall, except where the articles of government provide otherwise, have effect as if each department were a separate school.
School curriculum

17Duty of local education authority to state policy
(1)It shall be the duty of every local education authority—
(a)to determine, and keep under review, their policy in relation to the secular curriculum for the county, voluntary and special schools maintained by them ;
(b)to make, and keep up to date, a written statement of that policy; and
(c)to furnish the governing body and head teacher of every such school with a copy of the statement and publish it in such other manner as the authority consider appropriate.
(2)In discharging their duty under subsection (1) above, an authority shall consider, in particular—
(a)the range of the secular curriculum ; and
(b)the balance between its different components.
(3)In carrying out their functions under this Act or any other enactment, a local education authority shall have regard to their policy in relation to the secular curriculum for their schools, as expressed in their statement.
(4)Every head teacher to whom any copy of a statement is furnished under this section shall make it available, at all reasonable times, to persons wishing to inspect it.
18County, controlled and maintained special schools
(1)The articles of government for every county, controlled and maintained special school shall provide for it to be the duty of the governing body to consider—
(a)the policy of the local education authority as to the secular curriculum for the authority's schools, as expressed in the statement made by the authority under section 17 of this Act;
(b)what, in their opinion, should be the aims of the secular curriculum for the school; and
(c)how (if at all) the authority's policy with regard to matters other than sex education should in their opinion be modified in relation to the school; and to make, and keep up to date, a written statement of their conclusions.
(2)The articles of government for every such school shall provide for it to be the duty of the governing body—
(a)to consider separately (while having regard to the local education authority's statement under section 17 of this Act) the question whether sex education should form part of the secular curriculum for the school; and
(b)to make, and keep up to date, a separate written statement—
(i)of their policy with regard to the content and organisation of the relevant part of the curriculum ; or
(ii)where they conclude that sex education should not form part of the secular curriculum, of that conclusion.
(3)The articles of government for every such school shall provide for it to be the duty of the governing body—
(a)when considering the matters mentioned in subsections (1) and (2) above, to do so in consultation with the head teacher and to have regard—
(i)to any representations which are made to them, with regard to any of those matters, by any persons connected with the community served by the school; and
(ii)to any such representations which are made to them by the chief officer of police and which are connected with his responsibilities ;
(b)to consult the authority before making or varying any statement under subsection (1) above ; and
(c)to furnish the authority and head teacher with an up to date copy of any statement under this section.
(4)The articles of government for every such school shall provide for it to be the duty of the head teacher to make any statement furnished to him under this section available at all reasonable times, to persons wishing to inspect it.
(5)The articles of government for every such school shall provide for the determination and organisation of the secular curriculum for the school to be the responsibility of the head teacher and for it to be his duty to secure that that curriculum is followed within the school.
(6)The articles of government for every such school shall provide for it to be the duty of the head teacher, in discharging his duties in relation to the secular curriculum for the school—
(a)to consider the statement of the local education authority under section 17 of this Act and those of the governing body under this section ;
(b)to have regard—
(i)to any representations which are made to him, with regard to the determination or organisation of the secular curriculum, by any persons connected with the community served by the school; and
(ii)to any such representations which are made to him by the chief officer of police and which are connected with that officer's responsibilities; and
(c)to ensure that that curriculum—
(i)so far as it relates to sex education, is compatible with the governing body's policy (as expressed in their statement under subsection (2) above) except where that policy is incompatible with any part of the syllabus for a course which forms part of that curriculum and leads to a public examination ;
(ii)so far as it relates to other matters, is compatible with the authority's policy (as expressed in their statement) or, to the extent to which it is incompatible, is compatible with that policy as modified by the governing body's statement under subsection (1) above; and
(iii)is compatible with the enactments relating to education (including, in particular, those relating to children with special educational needs).
(7)The articles of government for every such school shall provide for the governing body to have power to review their conclusions about the matters mentioned in subsections (1) and (2) above whenever they think fit, and for it to be their duty to do so immediately following—
(a)the implementation of any proposal under—
(i)section 16 of the 1944 Act (transfer of schools to new sites);
(ii)section 12 or 13 of the 1980 Act (establishment, alteration and discontinuance of schools); or
(iii)section 15 of the 1980 Act (reduction of school places); which materially affects the school; or
(b)in the case of a maintained special school, any change in any of the arrangements made for pupils at the school and their special educational needs which must be complied with (by virtue of regulations made under section 12 of the 1981 Act) for the school to be approved as a maintained special school under section 9(5) of the 1944 Act.
(8)The article of government for every such school shall provide for it to be the duty of the governing body, where—
(a)they have completed such a review; and
(b)they consider it appropriate to make a fresh written statement of their conclusions ; to do so and to furnish the local education authority and the head teacher with a copy of it.
19Aided and special agreement schools
(1)The articles of government for every aided and special agreement school shall provide—
(a)for the content of the secular curriculum for the school to be under the control of the governing body ;
(b)for the governing body to have regard to the policy of the local education authority as to the curriculum for the authority's schools, as expressed in the statement made by the authority under section 17 of this Act; and
(c)for the head teacher to be allocated by the governing body such functions as will, subject to the resources available, enable him to determine and organise the curriculum and secure that it is followed within the school.
(2)The articles of government for every such school shall provide for it to be the duty of the governing body, when considering the content of the secular curriculum for the school, to have regard—
(a)to any representations which are made to them, with regard to that curriculum, by any persons connected with the community served by the school; and
(b)to any such representations which—
(i)are made to them by the chief officer of police ; and
(ii)are connected with his responsibilities.
(3)Where the governing body of any such school make any statement in writing of their policy as to the secular curriculum for the school they shall furnish a copy of it to the head teacher; and the head teacher shall make it available, at all reasonable times, to persons wishing to inspect it.
20Information for parents
The Secretary of State shall make regulations requiring the governing body of every county, voluntary and maintained special school to make available to parents of registered pupils at the school, in such form and manner and at such times as may be prescribed—
(a)such information as to any syllabuses to be followed by those pupils ; and
(b)such other information as to the educational provision made for them by the school; as may be prescribed.
School terms etc.

21Terms, sessions and holidays
(1)The articles of government for every county, controlled and maintained special school shall provide for it to be the duty of the local education authority to determine—
(a)the times at which the school session is to begin and end on any day ; and
(b)the dates and times at which the school terms and holidays are to begin and end.
(2)The articles of government for every such school shall provide for the local education authority to have power to require pupils in attendance at the school to attend at any place outside the school premises for the purpose of receiving any instruction or training included in the secular curriculum for the school.
(3)The articles of government for every aided and special agreement school shall make the same provision as is required by subsections (1) and (2) above, but in relation to the governing body in place of the local education authority.
Discipline

22Discipline: general duties
The articles of government for every county, voluntary and maintained special school shall provide—
(a)for it to be the duty of the head teacher to determine measures (which may include the making of rules and provision for enforcing them) to be taken with a view to—
(i)promoting, among pupils, self-discipline and proper regard for authority ;
(ii)encouraging good behaviour on the part of pupils;
(iii)securing that the standard of behaviour of pupils is acceptable ; and
(iv)otherwise regulating the conduct of pupils ;
(b)for it to be the duty of the head teacher, in determining any such measures—
(i)to act in accordance with any written statement of general principles provided for him by the governing body; and
(ii)to have regard to any guidance that they may offer in relation to particular matters;
(c)for it to be the duty of the head teacher to make any such measures generally known within the school;
(d)for the standard of behaviour which is to be regarded as acceptable at the school to be determined by the head teacher, so far as it is not determined by the governing body;
(e)for it to be the duty of the governing body and the head teacher to consult the local education authority, before determining any such measures, on any matter arising from the proposed measures which can reasonably be expected—
(i)to lead to increased expenditure by the authority; or
(ii)to affect the responsibilities of the authority as an employer;
(f)for the power to exclude a pupil from the school (whether by suspension, expulsion or otherwise) to be exercisable only by the head teacher.
23Exclusion of pupils: duty to inform parents etc.
The articles of government for every county, voluntary and maintained special school shall provide—
(a)for it to be the duty of the head teacher—
(i)where he excludes from the school a pupil who is under eighteen, to take (without delay) reasonable steps to inform a parent of the pupil of the period of the exclusion and the reasons for it;
(ii)where he decides that any exclusion of such a pupil from the school which was originally for a fixed or indefinite period should be made permanent, to take (without delay) reasonable steps to inform a parent of the pupil of his decision and of the reasons for it; and
(iii)where he excludes any pupil from the school to take (without delay) reasonable steps to inform the pupil, if he is aged eighteen or over, or a parent of his, if he is under eighteen, that the pupil or (as the case may be) parent may make representations about the exclusion to the governing body and the local education authority;
(b)for it to be the duty of the head teacher, where he excludes a pupil from the school—
(i)for more than five school days (in the aggregate) in any one term ; or
(ii)in circumstances in which the pupil would, as a result of his exclusion from the school, lose an opportunity to take any public examination; to inform the local education authority and the governing body (without delay) of the period of the exclusion and of the reasons for it and where he decides that any exclusion of a pupil from the school which was originally for a fixed or indefinite period should be made permanent, to inform them (without delay) of his decision and of the reasons for it.
24Reinstatement of excluded pupils: county controlled and maintained special schools
The articles of government for every county, controlled and maintained special school shall provide—
(a)for it to be the duty of the local education authority, where they have been informed of the permanent exclusion of a pupil from the school—
(i)to consider, after consulting the governing body, whether he should be reinstated immediately, reinstated by a particular date or not reinstated ;
(ii)where they consider that he should be reinstated, to give the appropriate direction to the head teacher; and
(iii)where they consider that he should not be reinstated, to inform the pupil (if he is aged eighteen or over) or a parent of his (if he is under eighteen) of their decision;
(b)for it to be the duty of the head teacher, where he has excluded a pupil from the school—
(i)for more than five school days (in the aggregate) in any one term; or
(ii)in circumstances in which the pupil would, as a result of his exclusion from the school, lose an opportunity to take any public examination ; to comply with any direction for the reinstatement of the pupil given by the governing body or the local education authority, in the case of an exclusion for a fixed period, or by the governing body, in the case of an exclusion which is for an indefinite period or is permanent ;
(c)for it to be the duty of the local education authority, where they have been informed of the indefinite exclusion of a pupil from the school, to consult the governing body and, where the governing body do not intend to direct the head teacher to reinstate the pupil or the authority consider that he should be reinstated by a date which is earlier than that determined by the governing body as the date by which he is to be reinstated—
(i)to direct that he be reinstated immediately; or
(ii)to direct that he be reinstated within such period as may be specified in the direction;
(d)for it to be the duty of the local education authority where—
(i)they have been informed of the exclusion of a pupil from the school for a fixed period ; and
(ii)they propose to give a direction for his reinstatement ; to consult the governing body before doing so ;
(e)for any direction given by virtue of paragraph (c) above to cease to have effect (without prejudice to any subsequent direction given by virtue of any other provision made by the articles in accordance with this section) if the head teacher decides that the exclusion of the pupil concerned should be made permanent;
(f)for it to be the duty of the head teacher to comply with any direction given in exercise of the duty imposed on the local education authority by virtue of paragraph (a) or (c) above;
(g)for it to be the duty of the head teacher, where conflicting directions for the reinstatement of a pupil are given by the governing body and the local education authority, to comply with that direction which will lead to the earlier reinstatement of the pupil; and
(h)for it to be the duty of the governing body and the local education authority to inform each other and—
(i)the pupil concerned, if he is aged eighteen or over; or
(ii)a parent of his, if he is under eighteen ; of any direction, of a kind mentioned in this section, which is given by them.
25Reinstatement of excluded pupils: aided and special agreement schools
The articles of government for every aided and special agreement school shall provide—
(a)for it to be the duty of the governing body, where they have been informed of the permanent exclusion of a pupil from the school—
(i)to consider whether he should be reinstated immediately, reinstated by a particular date or not reinstated;
(ii)where they consider that he should be reinstated, to give the appropriate direction to the head teacher; and
(iii)where they consider that he should not be reinstated, to inform (without delay) the local education authority and either the pupil, if he is aged eighteen or over, or a parent of his, if he is under eighteen, of their decision;
(b)for it to be the duty of the head teacher where he has excluded a pupil from the school—
(i)for more than five school days (in the aggregate) in any one term ; or
(ii)in circumstances in which the pupil would, as a result of his exclusion from the school, lose an opportunity to take any public examination; to comply with any direction for the reinstatement of the pupil given by the governing body or, in the case of an exclusion for a fixed period, by the governing body or the local education authority ;
(c)for it to be the duty of the local education authority to consult the governing body before giving any direction by virtue of paragraph (b) above ;
(d)for it to be the duty of the local education authority, where they have been informed of the indefinite exclusion of a pupil from the school, to consult the governing body and, where the governing body do not intend to direct the head teacher to reinstate the pupil or the authority consider that he should be reinstated by a date which is earlier than that determined by the governing body as the date by which he is to be reinstated—
(i)to direct that he be reinstated immediately; or
(ii)to direct that he be reinstated within such period as may be specified in the direction ;
(e)for any direction given by virtue of paragraph (d) above to cease to have effect (without prejudice to any direction given by virtue of any other provision made by the articles in accordance with this section) if the head teacher decides that the exclusion of the pupil concerned should be made permanent;
(f)for it to be the duty of the head teacher to comply with any direction given in exercise of the duty imposed on the local education authority by virtue of paragraph (d) above;
(g)for it to be the duty of the head teacher, where conflicting directions for the reinstatement of a pupil are given by the governing body and the local education authority, to comply with that direction which will lead to the earlier reinstatement of the pupil; and (h) for it to be the duty of the governing body and the local education authority to inform each other and—
(i)the pupil concerned, if he is aged eighteen or over; or
(ii)a parent of his, if he is under eighteen ; of any direction, of a kind mentioned in this section, which is given by them.
26Appeals
(1)Every local education authority shall make arrangements for enabling—
(a)a registered pupil at a county, controlled or maintained special school who is aged eighteen or over, or a parent of his, in the case of a pupil at such a school who is under eighteen, to appeal against any decision not to reinstate the pupil following his permanent exclusion from the school; and
(b)any governing body of such a school, the head teacher of which has been directed by the authority to reinstate any registered pupil at the school who has been permanently excluded, to appeal against the direction.
(2)The governing body of every aided or special agreement school shall make arrangements for enabling a registered pupil at the school who is aged eighteen or over, or a parent of a pupil at such a school who is under eighteen to appeal against any decision not to reinstate the pupil following his permanent exclusion from the school.
(3)Joint arrangements may be made under subsection (2) above by the governing bodies of two or more aided or special agreement schools maintained by the same local education authority.
(4)Any appeal by virtue of this section shall be to an appeal committee constituted in accordance with Part I of Schedule 2 to the 1980 Act; and Schedule 3 to this Act shall have effect, in place of Part II of Schedule 2 to the 1980 Act, in relation to any such appeal.
(5)The decision of an appeal committee on any such appeal shall be binding on the persons concerned; and where the committee determines that the pupil in question should be reinstated it shall direct that he be reinstated immediately or direct that he be reinstated by such date as is specified in the direction.
27Additional provision for appeals
Where the articles of government for any county, voluntary or maintained special school provide—
(a)for the parents of any pupil who is excluded from the school in circumstances in which no right of appeal is given by section 26 of this Act to have the right to appeal against his exclusion to a person specified by the articles; and
(b)for the procedure to be followed on such an appeal; any decision on such an appeal that the pupil should be reinstated, or that he should be reinstated earlier than would otherwise be the case, shall be binding on the head teacher.
28Local education authority's reserve power
(1)Every local education authority shall have power, in the circumstances mentioned in subsection (3) below, to take such steps in relation to any county, controlled or special school maintained by them as they consider are required to prevent the breakdown, or continuing breakdown, of discipline at the school.
(2)The governing body and the head teacher of every aided and special agreement school shall, in the circumstances mentioned in subsection (3) below, consider any representations made to them by the local education authority.
(3)The circumstances are that—
(a)in the opinion of the authority—
(i)the behaviour of registered pupils at the school; or
(ii)any action taken by such pupils or their parents; is such that the education of any such pupils is, or is likely in the immediate future to become, severely prejudiced; and
(b)the governing body have been informed in writing of the authority's opinion.
(4)Steps taken by an authority under subsection (1) above may include the giving of any direction to the governing body or head teacher.
Finance

29Finance
(1)The articles of government for every county, voluntary and maintained special school shall provide—
(a)for it to be the duty of the local education authority (with a view to assisting the governing body to judge whether expenditure in relation to their school represents the economic, efficient and effective use of resources) to furnish the governing body, once in every year, with a statement of—
(i)expenditure incurred or proposed to be incurred by the authority in meeting the day to day cost of running the school (itemised as the authority think appropriate); and
(ii)such expenditure of a capital nature, incurred or proposed to be incurred by the authority, as they consider appropriate;
(b)for it to be the duty of the local education authority to make available, in every year, a sum of money which the governing body are to be entitled to spend at their discretion (but subject to paragraph (c) below) on books, equipment, stationery and such other heads of expenditure (if any) as may be specified by the authority or prescribed by the Secretary of State ;
(c)for it to be the duty of the governing body, in spending any such sum, to comply with such reasonable conditions as the authority think fit to impose ;
(d)for the governing body to have power to delegate to the head teacher, to such extent as they may specify, their powers in relation to the sum so made available ; and
(e)for it to be the duty of the governing body not to incur any expenditure under any of the heads of expenditure mentioned in paragraph (b) above which, in the opinion of the head teacher, would be inappropriate in relation to the curriculum for the school.
(2)Before making any regulations under subsection (1)(6) above, the Secretary of State shall consult such associations of local authorities as appear to him to be concerned and any local authority with whom consultation appears to him to be desirable.
Reports and meetings

30Governors' annual report to parents
(1)The articles of government for every county, voluntary and maintained special school shall provide for it to be the duty of the governing body to prepare, once in every school year, a report (" the governors' report") containing—
(a)a summary of the steps taken by the governing body in the discharge of their functions during the period since their last report; and
(b)such other information as the articles may require.
(2)The articles of government for every such school shall, in particular, require the governors' report—
(a)to be as brief as is reasonably consistent with the requirements as to its contents; (b) where there is an obligation on the governing body (by virtue of section 31 of this Act) to hold an annual parents' meeting—
(i)to give details of the date, time and place for the next such meeting and its agenda ;
(ii)to indicate that the purpose of that meeting will be to discuss both the governors' report and the discharge by the governing body, the head teacher and the local education authority of their functions in relation to the school; and
(iii)to report on the consideration which has been given to any resolutions passed at the previous such meeting;
(c)to give the name of each governor and indicate whether he is a parent, teacher or foundation governor or was co-opted or otherwise appointed as a governor or is an ex officio governor;
(d)to say, in the case of an appointed governor, by whom he was appointed;
(e)to give, in relation to each governor who is not an ex officio governor, the date on which his term of office comes to an end;
(f)to name, and give the address of, the chairman of the governing body and their clerk;
(g)to give such information as is available to the governing body about arrangements for the next election of parent governors;
(h)to contain a financial statement—
(i)reproducing or summarising the latest financial statement provided for the governing body by the local education authority (by virtue of paragraph (a) of section 29(1) of this Act);
(ii)indicating, in general terms, how any sum made available to the governing body fey the authority (by virtue of paragraph (b) of that section), in the period covered by the report, was used; and
(iii)giving details of the application of any gifts made to the school in that period;
(i)to give, in the case of a secondary school, such information in relation to public examinations as is required to be published by virtue of section 8(5) of the 1980 Act;
(j)to describe what steps have been taken by the governing body to develop or strengthen the school's links with the community (including links with the police); and
(k)to draw attention to the information made available by the governing body in accordance with the regulations made under section 20 of this Act.
(3)The articles of government for every such school shall—
(a)enable the governing body to produce their report in such language or languages (in addition to English) as they consider appropriate ; and
(b)require them to produce it in such language or languages (in addition to English and any other language in which the governing body propose to produce it) as the local education authority may direct.
(4)The articles of government for every such school shall provide for it to be the duty of the governing body of any such school to take such steps as are reasonably practicable to secure that—
(a)the parents of all registered pupils at the school and all persons employed at the school are given (free of charge) a copy of the governors' report;
(b)copies of the report are available for inspection (at all reasonable times and free of charge) at the school; and
(c)where there is an obligation on the governing body (by virtue of section 31 of this Act) to hold an annual parents' meeting, copies of the report to be considered at that meeting are given to parents not less than two weeks before that meeting.
31Annual parents' meeting
(1)Subject to subsections (7) and (8) below, the articles of government for every county, voluntary and maintained special school shall provide for it to be the duty of the governing body to hold a meeting once in every school year (" the annual parents' meeting ") which is open to—
(a)all parents of registered pupils at the school;
(b)the head teacher ; and
(c)such other persons as the governing body may invite.
(2)The purpose of the meeting shall be to provide an opportunity for discussion of—
(a)the governors' report; and
(b)the discharge by the governing body, the head teacher and the local education authority of their functions in relation to the school.
(3)No person who is not a parent of a registered pupil at the school may vote on any question put to the meeting.
(4)The articles of government for every such school shall provide—
(a)for the proceedings at any annual parents' meeting to be under the control of the governing body ;
(b)for any annual parents' meeting, at which the required number of parents of registered pupils at the school are present, to be entitled to pass (by a simple majority) resolutions on any matters which may properly be discussed at the meeting ;
(c)for it to be the duty of the governing body—
(i)to consider any resolution which is duly passed at such a meeting and which they consider is a matter for them;
(ii)to send to the head teacher a copy of any such resolution which they consider is a matter for him; and
(iii)to send to the local education authority a copy of any such resolution which they consider is a matter for the authority ; and
(d)for it to be the duty of the head teacher, and of the local education authority, to consider any such resolution a copy of which has been sent to him, or them, by the governing body and to provide the governing body with a brief comment on it (in writing) for inclusion in their next governors' report.
(5)The articles of government for every county, controlled and maintained special school shall provide for any question whether any person is to be treated as the parent of a registered pupil at the school, for the purposes of any provision of the articles relating to the annual parents' meeting, to be determined by the local education authority.
(6)The articles of government for every aided or special agreement school shall provide for any such question to be determined by the governing body.
(7)The articles of government for every special school established in a hospital shall provide that where the governing body are of the opinion that it would be impracticable to hold an annual parents' meeting in a particular school year they may refrain from holding such a meeting in that year.
(8)The articles of government for every county, voluntary and maintained special school (other than a special school established in a hospital), the proportion of registered pupils at which who are boarders is, or is likely to be, at least fifty per cent., shall provide that where—
(a)the governing body are of the opinion that it would be impracticable to hold an annual parents' meeting in a particular school year; and
(b)at least fifty per cent, of the registered pupils at the school are boarders at the time when the governing body form that opinion ; they may refrain from holding such a meeting in that year.
(9)In subsection (4)(b) above " the required number", in relation to any school, means any number equal to at least twenty per cent, of the number of registered pupils at the school.
32Reports by governing body and head teacher
(1)The articles of government for every county, voluntary and maintained special school shall provide—
(a)for the governing body to furnish to the local education authority such reports in connection with the discharge of their functions as the authority may require (either on a regular basis or from time to time); and
(b)for the head teacher to furnish to the governing body or (as the case may be) local education authority such reports in connection with the discharge of his functions as the governing body or authority may so require.
(2)The articles of government for every aided school shall provide—
(a)for the local education authority to notify the governing body of any requirement of a kind mentioned in subsection (l)(b) above which is imposed by them on the head teacher; and
(b)for the head teacher to furnish the governing body with a copy of any report which he makes in complying with the requirement.
Admissions

33Admissions
(1)Where the governing body of any county or voluntary school are responsible for determining the arrangements for admitting pupils to the school, they shall—
(a)at least once in every school year, consult the local education authority as to whether those arrangements are satisfactory; and
(b)consult the authority before determining, or varying, any of them.
(2)Where the local education authority are responsible for determining the arrangements for admitting pupils to any such school they shall—
(a)at least once in every school year, consult the governing body as to whether those arrangements are satisfactory ; and
(b)consult the governing body before determining, or varying, any of them.
Appointment and dismissal of staff

34Determination of staff complement for schools
(1)Every county, controlled, special agreement and maintained special school shall have a complement of teaching and non-teaching posts determined by the local education authority.
(2)The complement for any such school shall include—
(a)all full-time teaching posts; and
(b)all part-time teaching posts which are to be filled by persons whose only employment with the authority will be at the school.
(3)The complement for any such school shall not include any staff employed by the authority solely in connection with either or both of the following—
(a)the provision of meals ;
(b)the supervision of pupils at midday.
35Appointment and dismissal of staff: introductory
(1)The appointment and dismissal of staff (including teachers) at every county, controlled, special agreement and maintained special school shall be under the control of the local education authority, but—
(a)the appointment of a head teacher shall be subject to the provision made by the articles of government for the school in accordance with section 37 of this Act;
(b)the appointment of a deputy head teacher shall be subject to the provision made by the articles in accordance with section 39 of this Act;
(c)the appointment and dismissal of the clerk to the governing body shall be subject to section 40 of this Act and to any provision made by the articles in accordance with that section;
(d)the appointment of any other staff (including any teacher), to a post which is part of the school's complement, shall be subject to the provision made by the articles in accordance with section 38 of this Act;
(e)the dismissal of staff shall be subject to the provision made by the articles in accordance with section 41 of this Act;
(f)the appointment and dismissal of staff at any school for which there is a temporary governing body shall be subject to the provisions of Schedule 2 to this Act; and
(g)this section is subject to the provisions of sections 27 and 28 of the 1944 Act (which relate to religious education).
(2)The articles of government for every such school shall provide for it to be the duty of the local education authority to consult the governing body and the head teacher before appointing any person to work solely at the school otherwise than—
(a)in a teaching post;
(b)in a non-teaching post which is part of the complement of the school; or
(c)solely in connection with either or both of the following—
(i)the provision of meals ;
(ii)the supervision of pupils at midday.
36The selection panel
(1)The articles of government for every county, controlled, special agreement and maintained special school shall provide—
(a)for the constitution of a selection panel whenever such a panel is required, by virtue of section 37 or 39 of this Act, in relation to the appointment of a head teacher or deputy head teacher;
(b)for the selection panel to consist of a specified number of persons appointed to it by the local education authority and a specified number of governors appointed to it by the governing body, the number so specified being—
(i)in each case, not less than three ; and
(ii)in relation to appointments made by the governing body, not less than the number specified in relation to appointments made by the authority; and
(c)for the governing body and the authority to have power to replace, at any time, any member of the selection panel whom they have appointed.
(2)The Secretary of State may by regulations make provision as to the meetings and proceedings of selection panels.
37Appointment of head teacher
(1)The articles of government for every county, controlled, special agreement and maintained special school shall provide—
(a)for it to be the duty of the local education authority not to appoint a person to be the head teacher of the school unless his appointment has been recommended by a selection panel constituted in accordance with the articles;
(b)for it to be the duty of the authority, in the event of the post of head teacher being vacant, to appoint an acting head teacher after consulting the governing body;
(c)for it to be the duty of the authority, before appointing a head teacher, to advertise the vacancy in such publications circulating throughout England and Wales as they consider appropriate;
(d)for it to be the duty of the selection panel constituted in relation to the appointment of a head teacher to interview such applicants for the post as they think fit;
(e)in the event of a failure of the panel to agree on the applicants whom they wish to interview—
(i)for those members of the panel appointed by the governing body to have the right to nominate not more than two applicants to be interviewed by the panel; and
(ii)for the other members of the panel to have the right to nominate not more than two other applicants to be so interviewed ;
(f)for it to be the duty of the panel, where they consider that it is appropriate to do so, to recommend to the authority for appointment as head teacher one of the applicants interviewed by them ;
(g)for it to be the duty of the panel, where they are unable to agree on a person to recommend to the authority—
(i)to repeat (with a view to reaching agreement) such of the steps which they are required to take by virtue of paragraphs (d) to (f) above as they think fit;
(ii)where they have repeated any of those steps and remain unable to agree, or have decided that it is not appropriate to repeat any of them, to require the authority to re-advertise the vacancy; and
(iii)where the vacancy is re-advertised, to repeat all of those steps ;
(h)for it to be the duty of the panel, where the authority decline to appoint a person recommended by them—
(i)where there are applicants for the post whom they have not interviewed, to interview such of those applicants (if any) as they think fit;
(ii)to recommend another of the applicants interviewed by them, if they think fit;
(iii)to ask the authority to re-advertise the vacancy, if they consider that it should be re-advertised ; and
(iv)where the vacancy is re-advertised, to repeat the steps which they are required to take by virtue of paragraphs (d) to (f);
(i)for it to be the duty of the authority to re-advertise the post of head teacher where they are required to do so by the panel; and for the authority to have power to do so, where—
(i)the post has been duly advertised;
(ii)the selection panel have failed to make either a recommendation which is acceptable to the authority or a request that the post be re-advertised; and
(iii)the authority are of the opinion that the panel have had sufficient time in which to carry out their functions; and
(j)for the chief education officer of the authority, or a member of his department nominated by him, to have the right to attend all proceedings of the panel (including interviews) for the purpose of giving advice to members of the panel.
(2)In this section " head teacher " does not include an acting head teacher.
38Appointment of certain other staff
(1)The articles of government for every county, controlled, special agreement and maintained special school shall provide for it to be the duty of the local education authority, where there is a vacancy in any post which is part of the complement of the school—
(a)to decide whether, in the case of a post which is not a new one, it should be retained ;
(b)to advertise the vacancy, and fill it in accordance with the procedure laid down by virtue of subsection (3) below, unless they have the intention mentioned in paragraph (c) below; and
(c)to fill the vacancy in accordance with the procedure laid down by virtue of subsection (4) below, if they intend to appoint a person who, at the time when they form that intention, is an employee of theirs or has been appointed to take up employment with them at a future date.
(2)This section does not apply in relation to the appointment of a head teacher or deputy head teacher or to any temporary appointment made pending—
(a)the return to work of the holder of the post in question; or
(b)the taking of any steps required by the articles of government in relation to the vacancy in question.
(3)The articles of government for every such school shall provide
(a)for it to be the duty of the authority, where they decide to advertise the vacancy, to do so in a manner likely in their opinion to bring it to the notice of persons (including employees of theirs) who are qualified to fill the post;
(b)for it to be the duty of the governing body, where the vacancy is advertised—
(i)to interview such applicants for the post as they think fit; and
(ii)where they consider that it is appropriate to do so, to recommend to the authority for appointment to the post one of the applicants interviewed by them ;
(c)for it to be the duty of the governing body, where they are unable to agree on a person to recommend to the authority—
(i)to repeat the steps which they are required to take by virtue of paragraph (b) above, if they consider that to do so might lead to their reaching agreement;
(ii)where they have repeated those steps and remain unable to agree, or have decided mat it is not appropriate to repeat them, to ask the authority to re-advertise the vacancy; and
(iii)where the vacancy is re-advertised, to repeat those steps;
(d)for it to be the duty of the governing body, where the authority decline to appoint a person recommended by them—
(i)where there are applicants for the post whom they have not interviewed, to interview such of those applicants (if any) as they think fit;
(ii)to recommend another of the applicants interviewed by them, if they think fit;
(iii)to ask the authority to re-advertise the vacancy, if they consider that it should be re-advertised ; and
(iv)where the vacancy is re-advertised, to repeat the steps which they are required to take by virtue of paragraph (b) above;
(e)for it to be the duty of the authority, where they are asked by the governing body to re-advertise the vacancy, to do so unless they decide—
(i)that the post is to be removed from the complement of the school; or
(ii)to appoint a person who, at the time when that decision is made, is an employee of theirs or has been appointed to take up employment with them at a future date; and
(f)for—
(i)the head teacher, where he would not otherwise be entitled to be present; and
(ii)such person (if any) as the authority appoint to represent them, to be entitled to be present, for the purpose of giving advice, whenever governors meet to discuss the appointment or an applicant is interviewed.
(4)The articles of government for every such school shall provide—
(a)in the event of the vacancy not being advertised, for the governing body to be entitled to determine a specification for the post in consultation with the head teacher;
(b)where the governing body have determined such a specification, for it to be their duty to send a copy of it to the authority;
(c)for it to be the duty of the authority—
(i)to have regard to the specification, and consult the governing body and the head teacher, when considering whom to appoint to the post; and
(ii)if they make an appointment to a teaching post with which the governing body disagree, to report the fact to the next meeting of their appropriate education committee.
(5)No local education authority shall appoint a person to a post which they have advertised in accordance with requirements imposed by virtue of subsection (3) above unless—
(a)his appointment has been recommended in accordance with those requirements ; or
(b)the authority decide to appoint a person who, at the time when that decision is made, is an employee of theirs or has been appointed to take up employment with them at a future date.
(6)The articles of government for every such school shall provide
(a)for the governing body to have power to delegate any of the functions which are theirs by virtue of this section, in relation to the filling of a particular vacancy or a vacancy of a kind specified by them, to—
(i)one or more governors ;
(ii)the head teacher ; or
(iii)one or more governors and the head teacher acting together; and
(b)for the provision made in the articles by virtue of subsection (3)(e) or (4)(c)(ii) to apply in such a case with the substitution of references to the person or persons to whom the functions are delegated for references to the governing body.
39Appointment of deputy head teacher
(1)The articles of government for every county, controlled, special agreement and maintained special school shall, in relation to the appointment of a deputy head teacher for the school, make—
(a)the same provision, modified in accordance with subsections (2) and (3) below, as that made by the articles (in accordance with section 37 of this Act) in relation to the appointment of a head teacher for the school; or
(b)the same provision as that made by the articles (in accordance with section 38 of this Act) in relation to the appointment of other teachers at the school.
(2)Articles of government which, in accordance with subsection (1) above, provide for the appointment of a deputy head teacher for the school to be on the recommendation of a selection panel shall provide for the head teacher, where he is not a member of the panel—
(a)to be entitled to be present, for the purpose of giving advice, at any proceedings of the panel (including interviews); and
(b)whether or not he attends any such proceedings, to be consulted by the panel before it makes any recommendation to the local education authority.
(3)No provision shall be required in the articles of government similar to that mentioned in section 37(1)(b) of this Act.
(4)In subsection (1) above " head teacher " does not include an acting head teacher.
40Appointment and dismissal of clerk to governing body
(1)The articles of government for every county and maintained special school shall provide for the clerk to the governing body to be appointed by the local education authority in accordance with arrangements to be determined by them in consultation with the governing body.
(2)The clerk to the governing body of any controlled or special agreement school shall be appointed—
(a)where the articles of government make provision in relation to his appointment, in accordance with that provision;
(b)in every other case, by the authority in accordance with arrangements determined by them in consultation with the governing body.
(3)Arrangements determined in respect of any school under subsections (1) or (2)(6) above may be varied by the authority in consultation with the governing body.
(4)The articles of government for every county and maintained special school shall provide for it to be the duty of the authority not to dismiss the clerk except in accordance with arrangements determined by them in consultation with the governing body.
(5)The articles of government for every county, controlled, special agreement and maintained special school shall provide for the governing body to have power, where the clerk fails to attend any meeting of theirs, to appoint one of their number to act as clerk for the purposes of that meeting, but without prejudice to his position as a governor.
(6)The clerk to the governing body of any controlled or special agreement schools may not be dismissed except—
(a)where the articles of government make provision in relation to his dismissal, in accordance with that provision ; or
(b)in any other case, in accordance with arrangements determined by the local education authority in consultation with the governing body.
(7)The articles of government for every county, controlled, special agreement and maintained special school shall provide for it to be the duty of the local education authority to consider any representations made to them by the governing body as to the dismissal of their clerk.
41Dismissal, etc. of staff
(1)The articles of government for every county, controlled, special agreement and maintained special school shall provide-
(a)for it to be the duty of the local education authority to consult the governing body and the head teacher (except where he is the person concerned) before—
(i)dismissing (otherwise than under section 27(5) or 28(4) of the 1944 Act, which allow foundation governors to require the authority to dismiss a reserved teacher) any person to whom subsection (3) below applies;
(ii)otherwise requiring any such person to cease to work at the school; or
(iii)permitting any such person to retire in circumstances in which he would be entitled to compensation for premature retirement;
(b)for it to be the duty of the local education authority, where a teacher at the school is required to complete an initial period of probation, to consult the governing body and the head teacher before—
(i)extending his period of probation ; or
(ii)deciding whether he has completed it successfully ;
(c)for it to be the duty of the local education authority, where the governing body recommend to them that a person should cease to work at the school, to consider their recommendation;
(d)for both the governing body and the head teacher to have power to suspend any person employed to work at the school where, in the opinion of the governing body or (as the case may be) the head teacher, his exclusion from the school is required ; and
(e)for it to be the duty of the governing body, or head teacher, when exercising that power—
(i)to inform the local education authority and the head teacher or (as the case may be) governing body forthwith; and
(ii)to end the suspension if directed to do so by the authority.
(2)In this section " suspend " means suspend without loss of emoluments.
(3)This subsection applies to any person who is employed—
(a)in a post which is part of the complement of the school in question; or
(b)to work solely at the school in any other post, otherwise than solely in connection with either or both of the following—
(i)the provision of meals ;
(ii)the supervision of pupils at midday.
School premises

42School premises
The articles of government for every county and maintained special school shall provide—
(a)for the use of the school premises at all times other than during any school session, or break between sessions on the same day, to be under the control of the governing body;
(b)for the governing body to exercise control subject to any direction given to them by the local education authority and in so doing to have regard to the desirability of the premises being made available (when not required by or in connection with the school) for use by members of the community served by the school.
Part IV
Miscellaneous

43Freedom of speech in universities, polytechnics and colleges
(1)Every individual and body of persons concerned in the government of any establishment to which this section applies shall take such steps as are reasonably practicable to ensure that freedom of speech within the law is secured for members, students and employees of the establishment and for visiting speakers.
(2)The duty imposed by subsection (1) above includes (in particular) the duty to ensure, so far as is reasonably practicable, that the use of any premises of the establishment is not denied to any individual or body of persons on any ground connected with—
(a)the beliefs or views of that individual or of any member of that body ; or
(b)the policy or objectives of that body.
(3)The governing body of every such establishment shall, with a view to facilitating the discharge of the duty imposed by subsection (1) above in relation to that establishment, issue and keep up to date a code of practice setting out—
(a)the procedures to be followed by members, students and employees of the establishment in connection with the organisation—
(i)of meetings which are to be held on premises of the establishment and which fall within any class of meeting specified in the code ; and
(ii)of other activities which are to take place on those premises and which fall within any class of activity so specified ; and
(b)the conduct required of such persons in connection with any such meeting or activity ; and dealing with such other matters as the governing body consider appropriate.
(4)Every individual and body of persons concerned in the government of any such establishment shall take such steps as are reasonably practicable (including where appropriate the initiation of disciplinary measures) to secure that the requirements of the code of practice for that establishment, issued under subsection (3) above, are complied with.
(5)The establishments to which this section applies are—
(a)any university;
(b)any establishment which is maintained by a local education authority and for which section 1 of the 1968 (No. 2) Act (government and conduct of colleges of education and other institutions providing further education) requires there to be an instrument of government; and
(c)any establishment of further education designated by or under regulations made under section 27 of the 1980 Act as an establishment substantially dependent for its maintenance on assistance from local education authorities or on grants under section 100(l)(i) of the 1944 Act.
(6)In this section—
" governing body in relation to any university, means the executive governing body which has responsibility for the management and administration of its revenue and property and the conduct of its affairs (that is to say the body commonly called the council of the university) ;
" university" includes a university college and any college, or institution in the nature of a college, in a university.
(7)Where any establishment—
(a)falls within subsection (5)(b) above ; or
(b)falls within subsection (5)(c) above by virtue of being substantially dependent for its maintenance on assistance from local education authorities ; the local education authority or authorities maintaining or (as the case may be) assisting the establishment shall, for the purposes of this section, be taken to be concerned in its government.
(8)Where a students' union occupies premises which are not premises of the establishment in connection with which the union is constituted, any reference in this section to the premises of the establishment shall be taken to include a reference to the premises occupied by the students' union.
44Political indoctrination
(1)The local education authority by whom any county, voluntary or special school is maintained, and the governing body and head teacher of the school shall forbid—
(a)the pursuit of partisan political activities by any of those registered pupils at the school who are junior pupils; and
(b)the promotion of partisan political views in the teaching of any subject in the school.
(2)In the case of activities which take place otherwise than on the premises of the school concerned, subsection (l)(a) above applies only where arrangements for junior pupils to take part in the activities are made by any member of the staff of the school (in his capacity as such) or by anyone acting on his, or the school's behalf.
45Duty to secure balanced treatment of political issues
The local education authority by whom any county, voluntary or special school is maintained, and the governing body and head teacher of the school, shall take such steps as are reasonably practicable to secure that where political issues are brought to the attention of pupils while they are—
(a)at the school; or
(b)taking part in extra-curricular activities which are provided or organised for registered pupils at the school by or on behalf of the school; they are offered a balanced presentation of opposing views.
46Sex education
The local education authority by whom any county, voluntary or special school is maintained, and the governing body and head teacher of the school, shall take such steps as are reasonably practicable to secure that where sex education is given to any registered pupils at the school it is given in such a manner as to encourage those pupils to have due regard to moral considerations and the value of family life.
47Abolition of corporal punishment
(1)Where, in any proceedings, it is shown that corporal punishment has been given to a pupil by or on the authority of a member of the staff, giving the punishment cannot be justified on the ground that it was done in pursuance of a right exercisable by the member of the staff by virtue of his position as such.
(2)Subject to subsection (3) below, references in this section to giving corporal punishment are references to doing anything for the purposes of punishing the pupil concerned (whether or not there are also other reasons for doing it) which, apart from any justification, would constitute battery.
(3)A person is not to be taken for the purposes of this section as giving corporal punishment by virtue of anything done for reasons that include averting an immediate danger of personal injury to, or an immediate danger to the property of, any person (including the pupil concerned).
(4)A person does not commit an offence by reason of any conduct relating to a pupil which would, apart from this section, be justified on the ground that it is done in pursuance of a right exercisable by a member of the staff by virtue of his position as such.
(5)In this section " pupil " means a person—
(a)for whom education is provided—
(i)at a school maintained by a local education authority;
(ii)at a special school not so maintained; or
(iii)at an independent school which is maintained or assisted by a Minister of the Crown (including a school of which a government department is the proprietor) or assisted by a local education authority and which falls within a prescribed class;
(b)for whom primary or secondary education, or education which would be primary or secondary education if it were provided full-time, is provided by a local education authority otherwise than at a school; or
(c)to whom subsection (6) below applies and for whom education is provided at an independent school which does not fall within paragraph (a)(iii) above ; but does not include any person who is aged eighteen or over.
(6)This subsection applies to a person if—
(a)he holds an assisted place under a scheme operated by the Secretary of State under section 17 of the 1980 Act;
(b)any of the fees or expenses payable in respect of his attendance at school are paid by the Secretary of State under section 100 of the 1944 Act or by a local education authority under section 6 of the Education (Miscellaneous Provisions) Act 1953 ;
(c)any of the fees payable in respect of his attendance at school are paid by a local education authority under section 81 of the 1944 Act; or
(d)he falls within a prescribed category of persons.
(7)The Secretary of State may prescribe, for the purposes of subsection (6)(d) above, one or more categories of persons who appear to him to be persons in respect of whom any fees are paid out of public funds.
(8)A person shall not be debarred from receiving education (whether by refusing him admission to a school, suspending his attendance or otherwise) by reason of the fact that this section applies in relation to him, or if he were admitted might so apply.
(9)The power conferred on the Secretary of State by paragraph 4 of Schedule 4 to the 1980 Act to terminate a participation agreement under section 17 of that Act if he is not satisfied that appropriate educational standards are being maintained includes power to do so if he is not satisfied that subsection (8) above is being complied with.
(10)In this section " member of the staff " means—
(a)in relation to a person who is a pupil by reason of the provision of education for him at any school, any teacher who works at the school and any other person who has lawful control or charge of the pupil and works there; and
(b)in relation to a person who is a pupil by reason of the provision of education for him by a local education authority at a place other than a school, any teacher employed by the authority who works at that place and any other person employed by the authority who has lawful control or charge of the pupil and works there.
(11)An Order in Council under paragraph 1(1)(6) of Schedule 1 to the Northern Ireland Act 1974 (legislation for Northern Ireland in the interim period) which states that it is made only for the purposes corresponding to those of this section—
(a)shall not be subject to paragraph 1(4) and (5) of that. Schedule (affirmative resolution of both Houses of Parliament); but
(b)shall be subject to annulment in pursuance of a resolulution of either House.
48Abolition of corporal punishment: Scotland
After section 48 of the Education Act (Scotland) 1980, there shall be inserted the following new section— “Corporal Punishment Abolition of corporal punishment of pupils.
48A(1)Where, in any proceedings, it is shown that corporal punishment has been given to a pupil by or on the authority of a member of the staff, giving the punishment cannot be justified on the ground that it was done in pursuance of a right exercisable by the member of the staff by virtue of his position as such.
(2)Subject to subsection (3) below, references in this section to giving corporal punishment are references to doing anything for the purposes of punishing the pupil concerned (whether or not there are also other reasons for doing it) which, apart from any justification, would constitute physical assault upon the person.
(3)A person is not to be taken for the purposes of this section as giving corporal punishment by virtue of anything done for reasons which include averting an immediate danger of personal injury to, or an immediate danger to the property of, any person (including the pupil concerned).
(4)A person does not commit an offence by reason of any conduct relating to a pupil which would, apart from this section, be justified on the ground that it was done in pursuance of a right exercisable by a member of the staff by virtue of his position as such.
(5)In this section ' pupil' means a person—
(a)for whom education is provided—
(i)at a public school,
(ii)at a grant-aided school, or
(iii)at an independent school, maintained or assisted by a Minister of the Crown, which is a school prescribed by regulations made under this section or falls within a category of schools so prescribed.
(b)for whom school education is provided by an education authority otherwise than at a school, or
(c)to whom subsection (6) below applies and for whom education is provided at an independent school which does not fall within paragraph (a)(iii) above.
(6)This subsection applies to a person if—
(a)he holds an assisted place under a scheme operated by the Secretary of State under section 75A of this Act.
(b)any of the fees or expenses payable in respect of his attendance at school are paid by the Secretary of State under section 73(f) of this Act.
(c)any of the fees payable in respect of his attendance at school are paid by an education authority under section 24(l)(c), 49 (2)(b), 50(1) or 64(3) of this Act, or
(d)he falls within a category, prescribed by regulations made under this section, of persons appearing to the Secretary of State to be persons in respect of whom any fees are paid out of public funds.
(7)In this section ' member of the staff' means—
(a)in relation to a person who is a pupil by reason of the provision of education for him at any school, any teacher who works at the school and any other person who has lawful control or charge of the pupil and works there, and
(b)in relation to a person who is a pupil by reason of the provision of school education for him by an education authority at a place other than a school, any teacher employed by the authority who works at that place and any other person employed by the authority who has lawful control or charge of the pupil and works there.
(8)The Secretary of State may, by order made by statutory instrument, prescribe—
(a)schools or categories of school for the purposes of subsection (5)(a)(iii) above ; and
(b)categories of persons for the purposes of subsection (6)(d) above.
(9)A person shall not be debarred from receiving education (whether by refusing him admission to, or excluding him from, a school or otherwise) by reason of the fact that this section applies in relation to him, or if he were admitted might so apply.
(10)The power conferred on the Secretary of State by paragraph 4 of Schedule 1A to this Act to revoke a determination under section 75A of this Act if he is not satisfied that appropriate educational standards are being maintained includes power to do so if he is not satisfied that subsection (9) above is being complied with.”.
49Appraisal of performance of teachers
(1)The Secretary of State may by regulations make provision requiring local education authorities, or such other persons as may be prescribed, to secure that the performance of teachers to whom the regulations apply—
(a)in discharging their duties ; and
(b)in engaging in other activities connected with the establishments at which they are employed ; is regularly appraised in accordance with such requirements as may be prescribed.
(2)The regulations may, in particular, make provision—
(a)requiring the governing bodies of such categories of schools or other establishments as may be prescribed—
(i)to secure, so far as it is reasonably practicable for them to do so, that any arrangements made in accordance with the regulations are complied with in relation to their establishments ; and
(ii)to provide such assistance to the local education authority as the authority may reasonably require in connection with their obligations under the regulations;
(b)with respect to the disclosure to teachers of the results of appraisals and the provision of opportunities for them to make representations with respect to those results; and
(c)requiring local education authorities to have regard to the results of appraisals in the exercise of such of then-functions as may be prescribed.
(3)The regulations may be expressed to apply to any of the following categories of teacher, that is to say teachers employed—
(a)at any school maintained by a local education authority;
(b)at any special school (whether or not so maintained);
(c)at any further education establishment provided by a local education authority;
(d)at any further education establishment designated by regulations made under section 27 of the 1980 Act as an establishment substantially dependent for its maintenance—
(i)on assistance from local education authorities ; or
(ii)on grants under section 100(1)(b) of the 1944 Act;
(e)at any school or other establishment which falls within any prescribed class of school, or other establishment, of a kind mentioned in any of paragraphs (a) to (d) above; or
(f)by a local education authority otherwise than at a school or further education establishment.
(4)Before making any regulations under subsection (1) above, the Secretary of State shall consult
(a)such associations of local authorities, and representatives of teachers, as appear to him to be concerned; and
(b)any other person with whom consultation appears to him to be desirable.
50Grants for teacher training, etc.
(1)The Secretary of State may by regulations make provision for the payment by him to local education authorities and other persons of grants to facilitate and encourage the training of—
(a)teachers;
(b)youth and community workers ;
(c)education welfare officers ;
(d)educational psychologists;
(e)local education authority inspectors ;
(f)education advisers employed by such authorities ; and
(g)such other classes of person, employed in connection with the discharge of any of the functions of such authorities, as may be prescribed.
(2)For the purposes of this section " training " includes—
(a)further training, whether or not the person undergoing it is already qualified;
(b)the provision of experience (whether or not within education) which is likely to benefit a person in his capacity as an employee of the kind in question ;
(c)training a person with a view to his continuing to be employed in education but in a different capacity; and
(d)the study of matters connected with, or relevant to, education.
(3)Regulations under this section may, in particular—
(a)provide for grants to be payable only in respect of training approved by the Secretary of State for the purposes of the regulations ;
(b)make provision whereby the making of payments by the Secretary of State in pursuance of the regulations is dependent on the fulfilment of such conditions as may be prescribed or otherwise determined by the Secretary of State ; and
(c)make provision requiring local education authorities, and other persons, to whom payments have been made in pursuance of the regulations to comply with such requests as may be prescribed or so determined.
(4)In this section—"education welfare officer" means any person who is employed by a local education authority, or employed by any other authority in connection with education, and whose duties include securing the regular attendance at school of pupils of compulsory school age ; "leisure-time facilities" means facilities of a kind which local education authorities are under the duty imposed by sections 41(b) and 53(1) of the 1944 Act (provision of facilities for leisure-time occupation, recreation and social and physical training) to secure are provided within their areas ; and " youth and community worker " means any person who is employed (whether or not by a local education authority) in such category of employment connected with leisure-time facilities as may be prescribed.
51Recoupment
(1)Subject to subsection (2) below, where any provision for primary, secondary or further education is made by a local education authority in respect of a pupil who belongs to the area of another such authority, the providing authority shall, on making a claim within the prescribed period, be entitled to be paid by the other authority—
(a)such amount as the authorities may agree; or
(b)failing agreement, such amount as may be determined in accordance with a direction given by the Secretary of State under this subsection.
(2)Subsection (1) above does not apply to provision for—
(a)primary education made (otherwise than in a hospital) in respect of a pupil who has not attained the age of five years; or
(b)further education made in respect of pupils who do not fall within a prescribed category ; unless it is made with the consent of the authority from whom payment is claimed.
(3)Any direction under subsection (1) above may—
(a)be a general direction applying to all cases to which it is expressed to apply or a direction applying to a particular case;
(b)be designed to provide for the amounts payable by one authority to another to reflect average costs incurred by local education authorities in the provision of education (whether in England and Wales as a whole or in any particular area or areas); and
(c)be based on figures for average costs determined by such body or bodies representing local education authorities, or on such other figures relating to costs so incurred, as the Secretary of State considers appropriate.
(4)A direction applying to a particular case may be given notwithstanding that a general direction would otherwise apply to that case.
(5)It shall not be a ground for refusing to admit a pupil to or excluding a pupil from, a further education establishment that he does not belong to the area of a local education authority maintaining or assisting that establishment (" a responsible authority ").
(6)Subsection (5) above does not apply
(a)in relation to pupils who do not fall into a prescribed category; or
(b)to any refusal to admit a pupil to a further education establishment where his admission would cause a pupil belonging to the area of a responsible authority to be refused admission to that establishment.
(7)References in this section to provision for education include references to provision of any benefits or services for which provision is made by or under the enactments relating to education.
(8)References in subsections (1) to (6) above to further education do not include references to further education of a kind such that expenditure on its provision would fall within paragraph 6 of Schedule 10 to the Local Government Planning and Land Act 1980.
(9)A local education authority may make a payment to another such authority under subsection (1) above notwithstanding that no claim has been made by the other authority under that subsection.
(10)For the purposes of this section any question whether a pupil belongs, or does not belong, to the area of a particular local education authority shall be decided, as it would for the purposes of the 1980 Act, in accordance with section 38(5) of that Act and the regulations made under that section.
(11)Any dispute between local education authorities as to whether one of them is entitled to be paid any amount by another under this section shall be determined by the Secretary of State.
(12)Section 31(8) of the London Government Act 1963 (obligations in relation to pupils from outside the area of local education authority) shall cease to have effect.
52Recoupment: cross-border provisions
(1)The Secretary of State may make regulations requiring or authorising payments of amounts determined by or under the regulations to be made by one authority to another where—
(a)the authority receiving the payment makes, in such cases or circumstances as may be specified in the regulations, provision for education in respect of a pupil having such connection with the area of the paying authority as may be so specified ; and
(b)one of the authorities is a local education authority and the other an education authority in Scotland.
(2)The basis on which amounts payable under the regulations are to be determined shall be such as the Secretary of State sees fit to specify in the regulations and may, in particular, be similar to that adopted by him in relation to directions given under section 51(1) of this Act.
(3)Any question concerning the connection of any pupil with the area of a particular local education authority or education authority shall be decided in accordance with the provisions of the regulations.
(4)The reference in subsection (1) above to provision for education includes a reference to provision of any benefits or services for which provision is made by or under the enactments relating to education.
53School transport
In section 55 of the 1944 Act (provision of transport and other facilities), the following subsection shall be added at the end—
“" (3) In considering whether or not they are required by subsection (1) above to make arrangements in relation to a particular pupil, the local education authority shall have regard (amongst other things) to the age of the pupil and the nature of the route, or alternative routes, which he could reasonably be expected to take”.
54Change of status of controlled school to aided school
—(1) On an application duly made to him by the governing body of any controlled school, the Secretary of State may by order direct that as from the date specified in the order the school shall be an aided school
(2)The Secretary of State shall not make an order under this section unless he is satisfied that the governing body will be able and willing—
(a)with the assistance of any maintenance contribution payable by him under the 1944 Act, to defray the expenses which would fall to be borne by them under section 15(3)(a) of that Act; and
(b)to pay to the local education authority any compensation payable by the governing body under section 55 of this Act.
(3)Where the governing body of a controlled school propose to apply for an order under this section they shall, after consulting the local education authority—
(a)publish their proposals in such manner as may be required by regulations made by the Secretary of State;
(b)submit a copy of the published proposals to him ; and
(c)provide him with such information as he may reasonably require in order to enable him to give proper consideration to the proposals.
(4)The published proposals shall be accompanied by a statement which explains the effect of subsection (5) below and specifies the date on which the proposals are intended to be implemented.
(5)Before the end of the period of two months beginning with the day on which the proposals are first published, any of the following may submit objections to the proposals to the Secretary of State-
(a)any ten or more local government electors for the area ;
(b)the governing body of any voluntary school affected by the proposals;
(c)any local education authority concerned.
(6)Where, in consequence of an order made under this section, an amount will be payable by a governing body by way of compensation under section 55 of this Act, the order—
(a)shall specify the amount so payable and the date by which it must be paid ; and
(b)may impose such conditions in relation to its payment as the Secretary of State thinks fit.
(7)Where the Secretary of State proposes, in making an order under this section, to specify as the date from which the school is to be an aided school a different date to that proposed by the governing body, he shall first consult both that body and the local education authority as to the date which it would be appropriate to specify in the order.
(8)On the application of the local education authority or of the foundation governors of the school any such order may be varied, by order made by the Secretary of State, so as to specify—
(a)a different date to that specified under subsection (1) above; or
(b)a different amount to that specified under subsection (6) above.
(9)Before applying to the Secretary of State under subsection (8) above for the variation of an order, the foundation governors of the school shall consult the other governors.
(10)Before making any variation under subsection (8) above the Secretary of State shall consult—
(a)the local education authority, in the case of an application for variation made by foundation governors; and
(b)the foundation governors of the school, in the case of any application for variation made by the local education authority.
(11)Where foundation governors are consulted by the Secretary of State under subsection (10)(b) above, they shall, before giving him their views, consult the other governors of the school.
(12)Any order under this section may make such provision (including the modification of any provision made by or under this Act) as the Secretary of State considers appropriate in connection with the transition of the school in question from controlled to aided status and may, in particular, make provision—
(a)as to the circumstances in which, and purposes for which, the school is to be treated, before the specified date, as if it were an aided school;
(b)as to the time by which the new instrument of government and articles of government (appropriate for an aided school) are to be made for the school and the consent and consultation which is to be required before they are made;
(c)where the local education authority propose to pass a resolution (under section 9 of this Act) to group the school when it becomes an aided school, as to the consent required before that resolution is passed ;
(d)as to the appointment and dismissal of staff for the school;
(e)as to the arrangements to be made in relation to the admission of pupils to the school;
(f)for the governing body of the school to continue, for such purposes as may be specified in the order, to act as the governing body after the school has become an aided school but before a new governing body has been constituted; and
(g)as to functions exercisable by, or in relation to, the governing body or the governors of any category so specified.
55Compensation payable by governing body on change from controlled to aided status
(1)Where a controlled school becomes an aided school by virtue of an order made under section 54 of this Act, the governing body shall pay to the local education authority (in accordance with the order) such sum, by way of compensation for capital expenditure on the school—
(a)as may be agreed by that body and the authority; or
(b)failing such agreement, as the Secretary of State thinks fit having regard to the current value of the property in question.
(2)In subsection (1) above " capital expenditure " means any expenditure incurred by the local education authority, or by any predecessor of theirs, in respect of the school under—
(a)section 2 of the Education (Miscellaneous Provisions) Act 1953 (power of Secretary of State, in certain circumstances, to require local education authority to defray expenses of establishing a controlled school);
(b)section 1 of the Education Act 1946 (power of Secretary of State, in certain circumstances, to require expenses incurred in enlarging controlled school to be paid by local education authority); or
(c)paragraph 1 of Schedule 1 to the Act of 1946 (provision of buildings etc. for voluntary schools); other than expenditure which could have been so incurred in respect of the school if it had always been an aided school.
(3)The Secretary of State may, for the purpose of assisting him in any determination which he is required to make under subsection (1) above, appoint such person as he thinks competent to advise him on the valuation of property.
(4)No contribution, grant or loan shall be paid, or other payment made, by the Secretary of State to the governing body of any controlled school in respect of any compensation payable by them under this section.
56Reports to Secretary of State
The governing body of every—
(a)county, voluntary and maintained special school; and
(b)establishment which is maintained by a local education authority and for which section 1 of the 1968 (No. 2) Act (government and conduct of colleges of education and other institutions providing further education) requires there to be an instrument of government; shall make such reports and returns, and give such information, to the Secretary of State as he may require for the purpose of the exercise of his functions in relation to education.
57Information and training for governors
Every local education authority shall secure—
(a)that every governor of a county, voluntary or special school maintained by them is provided (free of charge) with—
(i)a copy of the instrument of government, and of the articles of government, for the school; and
(ii)such other information as they consider appropriate in connection with the discharge of his functions as a governor; and
(b)that there is made available to every such governor (free of charge) such training as the authority consider necessary for the effective discharge of those functions.
58Travelling and subsistence allowances for governors of schools and establishments of further education
(1)A local education authority may, in accordance with the provisions of a scheme made by them for the purposes of this section, pay travelling and subsistence allowances to governors of—
(a)county, voluntary and maintained special schools; and
(b)any establishment which is maintained by a local education authority and for which section 1 of the 1968 (No. 2) Act (government and conduct of colleges of education and other institutions providing further education) requires there to be an instrument of government.
(2)Such a scheme may make different provision in relation to schools or other establishments of different categories (including provision for allowances not to be paid in respect of certain categories) but shall not make different provision in relation to different categories of governor of the same school or establishment.
(3)A local education authority shall not make any payment towards the cost of travelling or subsistence allowances for any governor of a designated establishment of further education if—
(a)the authority have not made any scheme under subsection (1) above; or
(b)the arrangements under which the allowance would otherwise be payable—
(i)provide for allowances which are to any extent more generous than the most generous payable by the authority under any such scheme; or
(ii)contain any provision which the authority would not have power to include in any such scheme.
(4)In this section " designated establishment of further education " means an establishment of further education designated by or under regulations made under section 27 of the 1980 Act as an establishment substantially dependent for its maintenance on assistance from local education authorities or on grants under section 100(1)(b) of the 1944 Act.
(5)Subject to subsection (6) below, a local education authority may pay travelling and subsistence allowances to persons appointed to represent them on the governing bodies of—
(a)establishments of further education which are not maintained or assisted by them ; or
(b)any independent school or special school which is not maintained by them.
(6)A local education authority shall not pay any allowance under subsection (5) above for expenses in respect of which the person incurring them is entitled to reimbursement by any person other than the authority or if—
(a)the authority have not made any scheme under subsection (1) above; or
(b)the arrangements under which the allowance would otherwise be payable—
(i)provide for allowances which are to any extent more generous than the most generous payable by the authority under any such scheme ; or
(ii)contain any provision which the authority would not have power to include in any such scheme.
(7)No allowance may be paid to any governor of a school or establishment of a kind mentioned in subsection (1) above in respect of the discharge of his functions as such a governor, otherwise than under this section.
59Repeal of section 4 of 1944 Act
Section 4 of the 1944 Act (which makes provision in relation to the two central advisory councils for education) shall cease to have effect.
60Discontinuance of Secretary of State's duty to make annual reports
(1)Section 5 of the 1944 Act (which requires the Secretary of State to make an annual report to Parliament) shall cease to have effect.
(2)The Secretary of State's report under that section for the year 1985 shall be the last such report that he is required to make.
61Minimum age for governors of establishments of further education
(1)No person shall be qualified for membership of the governing body of any institution—
(a)which is maintained by a local education authority; and
(b)for which section 1 of the 1968 (No. 2) Act (government and conduct of colleges of education and other institutions providing further education) requires there to be an instrument of government; unless he is a student of the institution or is aged eighteen or over at the date of his election or appointment.
(2)The Secretary of State may by regulations make provision restricting—
(a)in relation to such matters or classes of matter as may be prescribed;
(b)in such circumstances as may be prescribed ; and
(c)to such extent as may be prescribed ; the participation of any student of such an institution who is a member of its governing body in the proceedings of that body.
(3)The instrument of government for any such institution may make such provision in relation to restricting the participation of any such student in the proceedings of its governing body (in addition to that made by the regulations) as the regulations may authorise.
62Access to papers etc. of governing bodies
(1)The Secretary of State may make regulations requiring the governing body—
(a)of every county, voluntary and maintained special school; and
(b)of every institution of a kind mentioned in section 61 of this Act; to make available, to such persons or classes of person as may be prescribed, such documents and information relating to the meetings and proceedings of the governing body as may be prescribed.
(2)Documents and information required by the regulations to be made available shall be made available in such form and manner, and at such times, as may be prescribed.
Part V
Supplemental

63Orders and regulations
(1)Any power of the Secretary of State to make orders or regulations under this Act (other than under section 2(7), 9(6) or 54) shall be exercised by statutory instrument.
(2)Any such statutory instrument (other than one made under section 66, shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(3)Regulations and orders under this Act may make different provision for different cases or different circumstances and may contain such incidental, supplemental or transitional provisions as the Secretary of State thinks fit.
(4)Without prejudice to subsection (3) above, regulations under this Act may make in relation to Wales provision different from that made in relation to England.
64Expenses
There shall be defrayed out of money provided by Parliament—
(a)any expenses incurred by the Secretary of State under this Act; and
(b)any increase attributable to this Act in the sums pay able out of such money under any other Act.
65Interpretation
(1)In this Act—
" the 1944 Act " means the Education Act 1944 ;
" the 1968 (No. 2) Act" means the Education (No. 2) Act 1968;
" the 1980 Act " means the Education Act 1980 ;
" the 1981 Act" means the Education Act 1981 ;
" boarder " includes a pupil who boards during the week but not at weekends;
" co-opted governor ", in relation to any school, means a person who is appointed to be a member of the governing body of the school by being co-opted by those governors of the school who have not themselves been so appointed but does not include a governor appointed in accordance with any provision made by virtue of section 5 of this Act;
" exclude ", in relation to the exclusion of any pupil from a school, means exclude on disciplinary grounds;
" head teacher ", except where provision to the contrary is made, includes an acting head teacher ;
" maintained special school " means a special school which is maintained by a local education authority ;
" parent governor ", in relation to any school, means (subject to section 5 of and Schedule 1 to this Act) a person who is elected as a member of the governing body of the school by parents of registered pupils at the school and who is himself such a parent at the time when he is elected ;
" promoters ", in relation to any intended new school, or school which it is proposed should be maintained by a local education authority, means the persons who intend to establish the school or (as the case may be) who established the school which it is proposed should be so maintained, or their representatives;
" school day ", in relation to any school, means any day on which at that school there is a school session; and
" teacher governor ", in relation to any school, means (subject to Schedule 1 to this Act) a person who is elected as a member of the governing body of the school by teachers at the school and who is himself such a teacher at the time when he is elected.
(2)Except where otherwise provided, in this Act " governing body " and " governor " do not include a temporary governing body or any member of such a body.
66Commencement
(1)Sections 60 and 63 to 65, this section and section 67(1) to (3) and (7) of this Act shall come into force on the passing of this Act.
(2)Section 49 and 59 of this Act shall come into force at the end of the period of two months beginning with the day on which this Act is passed.
(3)The other provisions shall come into force on such date as the Secretary of State may by order appoint.
(4)Different dates may be appointed for different provisions or different purposes including, in particular, for the purpose of bringing particular provisions into force only in relation to particular schools or categories of school.
(5)Any order under this section may make such transitional provision as appears to the Secretary of State to be necessary or expedient in connection with the provisions brought into force by the order.
(6)Any such order may include such adaptations of the provisions which it brings into force, or of any other provisions of this Act then in force, as appear to him to be necessary or expedient for the purpose or in consequence of the operation of any provision of this Act (including, in particular, the provisions which the order brings into force) before the coming into force of any other provision.
67Short title etc.
(1)This Act may be cited as the Education (No. 2) Act 1986.
(2)This Act and the Education Acts 1944 to 1985 and the Education Act 1986 may be cited as the Education Acts 1944 to 1986.
(3)This Act shall be construed as one with the 1944 Act.
(4)Schedule 4 to this Act (which makes consequential amendments) shall have effect.
(5)This Act shall have effect subject to the transitional provisions set out in Schedule 5 to this Act.
(6)The enactments and instruments mentioned in Schedule 6 to this Act are hereby repealed or (as the case may be) revoked to the extent specified in the third column of that Schedule.
(7)In this Act
(a)sections 48, 52, 63(1) to (3) and 66(3) to (6), this section and so much of Schedule 6 as relates to any enactment which extends to Scotland, extend to Scotland; and
(b)section 47(11) and this section extend to Northern Ireland; but otherwise this Act extends only to England and Wales.

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1Private households and small undertakings and partnerships
(1)In section 6 of the Sex Discrimination Act 1975 (in this Act referred to as " the 1975 Act"), subsection (3) (which excludes private households and undertakings of five employees or less from the operation of the provisions of subsections (1) and (2) of that section) shall cease to have effect.
(2)After paragraph (b) of subsection (2) of section 7 of the 1975 Act (cases where being a man is a genuine occupational qualification) there shall be inserted the following paragraph—
“(ba)the job is likely to involve the holder of the job doing his work, or living, in a private home and needs to be held by a man because objection might reasonably be taken to allowing to a woman—
(i)the degree of physical or social contact with a person living in the home, or
(ii)the knowledge of intimate details of such a person's life,which is likely, because of the nature or circumstances of the job or of the home, to be allowed to, or available to, the holder of the job ; or”.
(3)In section 11 of the 1975 Act, in subsection (1) (which deals with discrimination against a woman in relation to a position as partner in a firm consisting of six or more partners), the words " consisting of six or more partners " shall cease to have effect.
2Discrimination as to retirement etc.
(1)In subsection (4) of section 6 of the 1975 Act (exclusion of provisions discriminating against employees etc. in relation to death or retirement), at the end there shall be inserted the words " except in so far as, in their application to provision in relation to retirement, they render it unlawful for a person to discriminate against a woman—
(a)in such of the terms on which he offers her employment as make provision in relation to the way in which he will afford her access to opportunities for promotion, transfer or training or as provide for her dismissal or demotion; or
(b)in the way he affords her access to opportunities for promotion, transfer or training or by refusing or deliberately omitting to afford her access to any such opportunities ; or
(c)by dismissing her or subjecting her to any detriment which results in her dismissal or consists in or involves her demotion."
(2)In subsection (4) of section 11 of the 1975 Act (exclusion of provisions discriminating against partners etc. in relation to death or retirement), at the end there shall be inserted the words " except in so far as, in their application to provision made in relation to retirement, they render it unlawful for a firm to discriminate against a woman—
(a)in such of the terms on which they offer her a position as partner as provide for her expulsion from that position ; or
(b)by expelling her from a position as partner or subjecting her to any detriment which results in her expulsion from such a position."
(3)In section 82 of the 1975 Act (interpretation), after subsection (1) there shall be inserted the following subsection—
“(1A)References in this Act to the dismissal of a person from employment or to the expulsion of a person from a position as partner include references—
(a)to the termination of that person's employment or partnership by the expiration of any period (including a period expiring by reference to an event or circumstance), not being a termination immediately after which the employment or partnership is renewed on the same terms ; and
(b)to the termination of that person's employment or partnership by any act of his (including the giving of notice) in circumstances such that he is entitled to terminate it without notice by reason of the conduct of the employer or, as the case may be, the conduct of the other partners.”
(4)In section 6 of the Equal Pay Act 1970 (exclusions of sections 1 to 5)—
(a)in subsection (1A)(b) (terms related to, or provision in connection with, death or retirement), at the end there shall be inserted the words
“other than a term or provision which, in relation to retirement, affords access to opportunities for promotion, transfer or training or provides for a woman's dismissal or demotion”; and
(b)in subsection (2) (meaning of retirement), at the end there shall be inserted the words
“and the reference in subsection (1A) above to a woman's dismissal shall be construed in accordance with section 82(lA) of the Sex Discrimination Act 1975 as a reference to her dismissal from employment.” 
3Age of retirement etc.: unfair dismissal
(1)For paragraph (b) of subsection (1) of section 64 of the Employment Protection (Consolidation) Act 1978 (upper age limit for unfair dismissal cases) there shall be substituted the following paragraph—
“(b)attained the following age on or before the effective date of termination, that is to say—
(i)if in the undertaking in which he was employed there was a normal retiring age for an employee holding the position which he held and the age was the same whether the employee holding that position was a man or a woman, that normal retiring age; and
(ii)in any other case, the age of sixty-five.”
(2)In subsection (6) of section 73 of the said Act of 1978 (definitions for the purpose of the provision for reducing a basic award for unfair dismissal), for the words from "' the specified anniversary ' " to " her birth " there shall be substituted the words
“' the specified anniversary' in relation to an employee means the sixty-fourth anniversary of the day of his birth”.
(3)Subsection (2) above shall not affect any award for the unfair dismissal of an employee in relation to whom the effective date of termination (within the meaning of Part V of the said Act of 1978) was before the coming into force of that subsection.
4Discrimination in relation to training
(1)Section 47 of the 1975 Act (discrimination in relation to training by a training body) shall be amended as follows.
(2)In subsections (1) and (3)—
(a)for the words " a training body " there shall be substituted the words
“any person”; and
(b)for the words " it appears to the training body " there shall be substituted the words
“it reasonably appears to that person”.
(3)In subsection (2)—
(a)for the words " it appears to a training body " there shall be substituted the words
“it reasonably appears to any person”; and
(b)for the words " the training body " there shall be substituted the words
“that person”.
(4)For subsection (4) (definition of, and power to designate, training body) there shall be substituted the following subsection—
“(4)The preceding provisions of this section shall not apply in relation to any discrimination which is rendered unlawful by section 6.”
5Discrimination required by public entertainment licences
(1)Nothing in
(a)any licence granted (whether before or after the coming into force of this section) under Schedule 1 to the Local Government (Miscellaneous Provisions) Act 1982 or Schedule 12 to the London Government Act 1963 (public entertainment licences); or
(b)any regulations made for the purpose of prescribing the terms, conditions or restrictions on or subject to which any such licence is deemed to be granted, shall have effect, at any time after the coming into force of this section, so as to require any person to do any act which, apart from section 51 of the 1975 Act (acts done under statutory authority), is rendered unlawful by Part II of the 1975 Act (discrimination in relation to employment) or by so much of Part IV of the 1975 Act as relates to acts rendered unlawful by the said Part II.
(2)In this section " act" has the same meaning as in the 1975 Act.
6Collective agreements and rules of undertakings
(1)Without prejudice to the generality of section 77 of the 1975 Act (which makes provision with respect to the validity and revision of contracts), that section shall apply, as it applies in relation to the term of a contract, to the following, namely—
(a)any term of a collective agreement, including an agreement which was not intended, or is presumed not to have been intended, to be a legally enforceable contract;
(b)any rule made by an employer for application to all or any of the persons who are employed by him or who apply to be, or are, considered by him for employment;
(c)any rule made by an organisation, authority or body to which subsection (2) below applies for application to all or any of its members or prospective members or to all or any of the persons on whom it has conferred authorisations or qualifications or who are seeking the authorisations or qualifications which it has power to confer;and that section shall so apply whether the agreement was entered into, or the rule made, before or after the coming into force of this section.
(2)This subsection applies to—
(a)any organisation of workers;
(b)any organisation of employers;
(c)any organisation whose members carry on a particular profession or trade for the purposes of which the organisation exists;
(d)any authority or body which can confer an authorisation or qualification which is needed for, or facilitates, engagement in a particular profession or trade.
(3)For the purposes of the said section 77 a term or rule shall be deemed to provide for the doing of an act which would be rendered unlawful by the 1975 Act if—
(a)it provides for the inclusion in any contract of employment of any term which by virtue of an equality clause would fall either to be modified or to be supplemented by an additional term; and
(b)that clause would not be prevented from operating in relation to that contract by section 1(3) of the Equal Pay Act 1970 (material factors justifying discrimination).
(4)Nothing in the said section 77 shall affect the operation of any term or rule in so far as it provides for the doing of a particular act in circumstances where the doing of that act would not be, or be deemed by virtue of subsection (3) above to be, rendered unlawful by the 1975 Act.
(5)The avoidance by virtue of the said section 77 of any term or rule which provides for any person to be discriminated against shall be without prejudice to the following rights except in so far as they enable any person to require another person to be treated less favourably than himself, namely—
(a)such of the rights of the person to be discriminated against; and
(b)such of the rights of any person who will be treated more favourably in direct or indirect consequence Of the discrimination,as are conferred by or in respect of a contract made or modified wholly or partly in pursuance of, or by reference to, that term or rule.
(6)In this section " collective agreement " means any agreement relating to one or more of the matters mentioned in section 29(1) of the Trade Union and Labour Relations Act 1974 (meaning of trade dispute), being an agreement made by or on behalf of one or more employers or one or more organisations of employers or associations of such organisations with one or more organisations of workers or associations of such organisations.
(7)Any expression used in this section and in the 1975 Act has the same meaning in this section as in that Act, and this section shall have effect as if the terms of any service to which Parts II and IV of that Act apply by virtue of subsection (2) of section 85 of that Act (Crown application) were terms of a contract of employment and, in relation to the terms of any such service, as if service for the purposes of any person mentioned in that subsection were employment by that person.
7Removal of restrictions on working hours and conditions of women
(1)Section 1 of and Part I of Schedule 1 to the Hours of Employment (Conventions) Act 1936 (which impose restrictions on the employment of women by night in industrial undertakings) shall cease to have effect.
(2)The following provisions of the Mines and Quarries Act 1954 (which contain provisions with respect to women and young persons employed at a mine or quarry) shall cease to have effect with respect to women employed at a mine or quarry, that is to say—
(a)section 125 (provisions as to hours worked);
(b)section 126 (periods of employment);
(c)section 128 (notice fixing periods of employment); and
(d)section 131 (register of women and young persons employed).
(3)The following provisions of the Factories Act 1961 (which contain provisions with respect to women and young persons employed in factories) shall cease to have effect with respect to women employed in factories, that is to say—
(a)section 86 (general conditions as to hours of employment);
(b)section 88 (notice fixing hours of employment);
(c)section 91 (restriction of employment inside and outside factory on the same day);
(d)section 92 (prohibition of use during intervals of rooms where a process is being carried out);
(e)section 93 (prohibition of Sunday employment); and
(f)section 94 (annual holidays);and accordingly, in section 89(9)(a) of that Act (which relates to overtime working), for the words from " no woman " to " young person " there shall be substituted the words
“no young person shall be employed”.
(4)The Secretary of State may by order made by statutory instrument make such provision amending or revoking any subordinate legislation (within the meaning of the Interpretation Act 1978) as he considers appropriate—
(a)in consequence of the preceding provisions of this section;or
(b)for removing any restriction which is contained in that subordinate legislation and appears to him to be equivalent to a restriction removed by this section; and an order under this section may contain such consequential and transitional provision as appears to the Secretary of State to be expedient.
(5)A statutory instrument containing an order under subsection (4) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
8Repeal of Baking Industry (Hours of Work) Act 1954
The Baking Industry (Hours of Work) Act 1954 (which imposes restrictions on the hours for which a bakery worker may do work in relation to which restrictions on the working hours of women are removed by virtue of section 7 above) shall cease to have effect.
9Consequential amendment, repeals and saving
(1)In section 6(1) of the Equal Pay Act 1970 (exclusion of operation of equality clause and section 3(4) in relation to certain matters), for the words from the beginning to "shall" there shall be substituted the words
“An equality clause shall not”.
(2)The enactments mentioned in the Schedule to this Act (which include enactments that are no longer of practical effect) are hereby repealed to the extent specified in the third column of that Schedule.
(3)Neither the repeal by this Act of section 3 of the Equal Pay Act 1970 (collective agreements and pay structures) nor the amendment made by subsection (1) above shall affect—
(a)the continuing effect, after the coming into force of that repeal, of any declaration made under that section before the coming into force of that repeal; or
(b)the operation, at any time after the coming into force of that repeal, of section 5(1) of that Act in so far as it refers to the rules which apply under subsection (4) of the said section 3.
10Short title, commencement and extent
(1)This Act may be cited as the Sex Discrimination Act 1986.
(2)Sections 1, 6 and 9(1) and (3) above and Part II of the Schedule to this Act shall come into force at the end of the period of three months beginning with the day on which this Act is passed.
(3)Subject to subsection (4) below, sections 2, 3, 7 and 8 above and Part III of the Schedule to this Act shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint, and different days may be so appointed for different provisions or for different purposes.
(4)Except in so far as they come into force at an earlier time under subsection (3) above, sections 2 and 3 above shall come into force at the end of the period of twelve months beginning with the day on which this Act is passed.
(5)This Act does not extend to Northern Ireland except for the purpose of repealing, in their application to Northern Ireland, sections 1 and 4(1) of and Part I of Schedule 1 to the Hours of Employment (Conventions) Act 1936.

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1Investments and investment business
(1)In this Act, unless the context otherwise requires, " investment" means any asset, right or interest falling within any paragraph in Part I of Schedule 1 to this Act
(2)In this Act " investment business " means the business of engaging in one or more of the activities which fall within the paragraphs in Part II of that Schedule and are not excluded by Part III of that Schedule.
(3)For the purposes of this Act a person carries on investment business in the United Kingdom if he—
(a)carries on investment business from a permanent place of business maintained by him in the United Kingdom; or
(b)engages in the United Kingdom in one or more of the activities which fall within the paragraphs in Part II of that Schedule and are not excluded by Part III or IV of that Schedule and his doing so constitutes the carrying on by him of a business in the United Kingdom.
(4)Parts I to IV of that Schedule shall be construed in accordance with Part V.
2Power to extend or restrict scope of Act
(1)The Secretary of State may by order amend Schedule 1 to this Act so as—
(a)to extend or restrict the meaning of investment for the purposes of all or any provisions of this Act; or
(b)to extend or restrict for the purposes of all or any of those provisions the activities that are to constitute the carrying on of investment business or the carrying on of such business in the United Kingdom.
(2)The amendments that may be made tor the purposes of subsection (1)(b) above include amendments conferring powers on the Secretary of State, whether by extending or modifying any provision of that Schedule which confers such powers or by adding further such provisions.
(3)An order under this section which extends the meaning of investment or extends the activities that are to constitute the carrying on of investment business or the carrying on of such business in the United Kingdom shall be laid before Parliament after being made and shall cease to have effect at the end of the period of twenty-eight days beginning with the day on which it is made (but without prejudice to anything done under the order or to the making of a new order) unless before the end of that period the order is approved by a resolution of each House of Parliament
(4)In reckoning the period mentioned in subsection (3) above no account shall be taken of any time during which Parliament is dissolved or prorogued or during which both Houses are adjourned for more than four days.
(5)Any order under this section to which subsection (3) above does not apply shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(6)An order under this section may contain such transitional provisions as the Secretary of State thinks necessary or expedient
Chapter II
Restriction on Carrying on Business

3Persons entitled to carry on investment business
No person shall Carry on, or purport to carry on. Investment business in the United Kingdom unless he is an authorised person under Chapter III or an exempted person under Chapter IV of this Part of this Act.
4Offences
(1)Any person who carries on, or purports to carry on. investment business in contravention of section 3 above shall be guilty of an offence and liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;
(b)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
(2)In proceedings brought against any person for an offence under this section it shall be a defence for him to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of the offence.
5Agreements made by or through unauthorised persons
(1)Subject to subsection (3) below, any agreement to which this subsection applies—
(a)which is entered into by a person in the course of carrying on investment business in contravention of section 3 above; or
(b)which is entered into—
(i)by a person who is an authorised person or an exempted person in respect of the investment business in the course of which he enters into die agreement ; but
(ii)in consequence of anything said or done by a person in the course of carrying on investment business in contravention of that section, shall be unenforceable against the other party; and that party shall be entitled to recover any money or other property paid or transferred by him under the agreement, together with compensation for any loss sustained by him as a result of having parted with it
(2)The compensation recoverable under subsection (1) above shall be such as the parties may agree or as the court may, on the application of either party, determine.
(3)A court may allow an agreement to which subsection (1) above applies to be enforced or money and property paid or transferred under it to be retained if it is satisfied—
(a)in a case within paragraph (a) of that subsection, that the person mentioned in that paragraph reasonably believed that his entering into the agreement did not constitute a contravention of section 3 above ;
(b)in a case within paragraph (b) of that subsection, that the person mentioned in sub-paragraph (i) of that paragraph did not know that the agreement was entered into as mentioned in sub-paragraph (ii) of that paragraph ; and
(c)in either case, that it is just and equitable for the agreement to be enforced or, as the case may be, for the money or property paid or transferred under it to be retained.
(4)Where a person elects not to perform an agreement which by virtue of this section is unenforceable against him or by virtue of this section recovers money paid or other property transferred by him under an agreement he shall repay any money and return any other property received by him under the agreement.
(5)Where any property transferred under an agreement to which this section applies has passed to a third party the references to that property in subsections (1), (3) and (4) above shall be construed as references to its value at the time of its transfer under the agreement.
(6)A contravention of section 3 above shall not make an agreement illegal or invalid to any greater extent than is provided in this section.
(7)Subsection (1) above applies to any agreement the making or performance of which by the person seeking to enforce it or from whom money or other property is recoverable under this section constitutes an activity which falls within any paragraph of Part II of Schedule 1 to this Act and is not excluded by Part III or IV of that Schedule.
6Injunctions and restitution orders
(1)If, on the application of the Secretary of State, the court is satisfied—
(a)that there is a reasonable likelihood that a person will contravene section 3 above; or
(b)that any person has contravened that section and that there is a reasonable likelihood that the contravention will continue or be repeated, the court may grant an injunction restraining the contravention or, in Scotland, an interdict prohibiting the contravention.
(2)If, on the application of the Secretary of State, the court is satisfied that a person has entered into any transaction in contravention of section 3 above the court may order that person and any other person who appears to the court to have been knowingly concerned in the contravention to take such steps as the court may direct for restoring the parties to the position in which they were before the transaction was entered into.
(3)The court may, on the application of the Secretary of State, make an order under subsection (4) below or, in relation to Scotland, under subsection (5) below if satisfied that a person has been carrying on investment business in contravention of section 3 above and—
(a)that profits have accrued to that person as a result of carrying on that business; or
(b)that one or more investors have suffered loss or been otherwise adversely affected as a result of his contravention of section 47 or 56 below or failure to act substantially in accordance with any of the rules or regulations made under Chapter V of this Part of this Act
(4)The court may under this subsection order the person concerned to pay into court, or appoint a receiver to recover from him, such sum as appears to the court to be just having regard—
(a)in a case within paragraph (a) of subsection (3) above to the profits appearing to the court to have accrued;
(b)in a case within paragraph (b) of that subsection, to the extent of the loss or other adverse effect; or
(c)in a case within both paragraphs (a) and (b) of that subsection, to the profits and to the extent of the loss or other adverse effect.
(5)The court may under this subsection order the person concerned to pay to the applicant such sum as appears to the court to be just having regard to the considerations mentioned in paragraphs (a) to (c) of subsection (4) above.
(6)Any amount paid into court by or recovered from a person in pursuance of an order under subsection (4) or (5) above shall be paid out to such person or distributed among such persons as the court may direct, being a person or persons appearing to the court to have entered into transactions with that person as a result of which the profits mentioned in paragraph (a) of subsection (3) above have accrued to him or the loss or other adverse effect mentioned in paragraph (b) of that subsection has been suffered.
(7)On an application under subsection (3) above the court may require the person concerned to furnish it with such accounts or other information as it may require for establishing whether any and, if so, what profits have accrued to him as mentioned in paragraph (a) of that subsection and for determining how any amounts are to be paid or distributed under subsection (6) above; and the court may require any such accounts or other information to be verified in such manner as it may direct
(8)The jurisdiction conferred by this section shall be exercisable by the High Court and the Court of Session.
(9)Nothing in this section affects the right of any person other than the Secretary of State to bring proceedings in respect of any of the matters to which this section applies.
Chapter III
Authorised Persons

Members of recognised self-regulating organisations

7Authorisation by membership of recognised self-regulating organisations
(1)Subject to subsection (2) below, a member of a recognised self-regulating organisation is an authorised person by virtue of his membership of that organisation.
(2)This section does not apply to a member who is an authorised person by virtue of section 22 or 23 below or an insurance company which is an authorised person by virtue of section 31 below.
8Self-regulating organisations
(1)In this Act a " self-regulating organisation " means a body (whether a body corporate or an unincorporated association) which regulates the carrying on of investment business of any kind by enforcing rules which are binding on persons carrying on business of that kind either because they are members of that body or because they are otherwise subject to its control.
(2)In this Act references to the members of a self-regulating organisation are references to the persons who, whether or not members of the organisation, are subject to its rules in carrying on the business in question.
(3)In this Act references to the rules of a self-regulating organisation are references to the rules (whether or not laid down by the organisation itself) which the organisation has power to enforce in relation to the carrying on of the business in question or which relate to the admission and expulsion of members of the organisation or otherwise to its constitution.
(4)In this Act references to guidance issued by a self-regulating organisation are references to guidance issued or any recommendation made by it to all or any class of its members or persons seeking to become members which would, if it were a rule, fall within subsection (3) above.
9Applications for recognition
(1)A self-regulating organisation may apply to the Secretary of State for an order declaring it to be a recognised self-regulating organisation for the purposes of this Act.
(2)Any such application—
(a)shall be made in such manner as the Secretary of State may direct; and
(b)shall be accompanied by such information as the Secretary of State may reasonably require for the purpose of determining the application.
(3)At any time after receiving an application and before determining it the Secretary of State may require the applicant to furnish additional information.
(4)The directions and requirements given or imposed under subsections (2) and (3) above may differ as between different applications.
(5)Any information to be furnished to the Secretary of State under this section shall, if he so requires, be in such form or verified in such manner as he may specify.
(6)Every application shall be accompanied by a copy of the applicant's rules and of any guidance issued by the applicant which is intended to have continuing effect and is issued in writing or other legible form.
10Grant and refusal of recognition
(1)The Secretary of State may, on an application duly made in accordance with section 9 above and after being furnished with all such information as he may require under that section, make or refuse to make an order (" a recognition order ") declaring the applicant to be a recognised self-regulating organisation.
(2)Subject to subsection (4) below and to Chapter XIV of this Part of this Act, the Secretary of State shall make a recognition order if it appears to him from the information furnished by the organisation making the application and having regard to any other information in his possession that the requirements of subsection (3) below and of Schedule 2 to this Act are satisfied as respects that organisation.
(3)Where there is a kind of investment business with which the organisation is not concerned, its rules must preclude a member from carrying on investment business of that kind unless he is an authorised person otherwise than by virtue of his membership of the organisation or an exempted person in respect of that business.
(4)The Secretary of State may refuse to make a recognition order in respect of an organisation if he considers that its recognition is unnecessary having regard to the existence of one or more other organisations which are concerned with investment business of a kind with which the applicant is concerned and which have been or are likely to be recognised under this section.
(5)Where the Secretary of State refuses an application for a recognition order he shall give the applicant a written notice to that effect specifying a requirement which in the opinion of the Secretary of State is not satisfied, stating that the application is refused on the ground mentioned in subsection (4) above or stating that it is refused by virtue of Chapter XIV.
(6)A recognition order shall state the date on which it takes effect.
11Revocation of recognition
(1)A recognition order may be revoked by a further order made by the Secretary of State if at any time it appears to him—
(a)that section 10(3) above or any requirement of Schedule 2 to this Act is not satisfied in the case of the organisation to which the recognition order relates (" the recognised organisation ");
(b)that the recognised organisation has failed to comply with any obligation to which it is subject by virtue of this Act; or
(c)that the continued recognition of the organisation is undesirable having regard to the existence of one or more other organisations which have been or are to be recognised under section 10 above.
(2)An order revoking a recognition order shall state the date on which it takes effect and that date shall not be earlier than three months after the day on which the revocation order is made.
(3)Before revoking a recognition order the Secretary of State shall give written notice of his intention to do so to the recognised organisation, take such steps as he considers reasonably practicable for bringing the notice to the attention of members of the organisation and publish it in such manner as he thinks appropriate for bringing it to the attention of any other persons who are in his opinion likely to be affected.
(4)A notice under subsection (3) above shall state the reasons for which the Secretary of State proposes to act and give particulars of the rights conferred by subsection (5) below.
(5)An organisation on which a notice is served under subsection (3) above, any member of the organisation and any other person who appears to the Secretary of State to be affected may within three months after the date of service or publication, or within such longer time as the Secretary of State may allow, make written representations to the Secretary of State and, if desired, oral representations to a person appointed for that purpose by the Secretary of State; and the Secretary of State shall have regard to any representations made in accordance with this subsection in determining whether to revoke the recognition order.
(6)If in any case the Secretary of State considers it essential to do so in the interests of investors he may revoke a recognition order without regard to the restriction imposed by subsection (2) above and notwithstanding that no notice has been given or published under subsection (3) above or that the time for making representations in pursuance of such a notice has not expired.
(7)An order revoking a recognition order may contain such transitional provisions as the Secretary of State thinks necessary or expedient.
(8)A recognition order may be revoked at the request or with the consent of the recognised organisation and any such revocation shall not be subject to the restrictions imposed by subsections (1) and (2) or the requirements of subsections (3) to (5) above.
(9)On making an order revoking a recognition order the Secretary of State shall give the organisation written notice of the making of the order, take such steps as he considers reasonably practicable for bringing the making of the order to the attention of members of the organisation and publish a notice of the making of the order in such manner as he thinks appropriate for bringing it to the attention of any other persons who are in his opinion likely to be affected.
12Compliance orders
(1)If at any time it appears to the Secretary of State—
(a)that subsection (3) of section 10 above or any requirement of Schedule 2 to this Act is not satisfied in the case of a recognised organisation; or
(b)that a recognised organisation has failed to comply with any obligation to which it is subject by virtue of this Act, he may, instead of revoking the recognition order under section 11 above, make an application to the court under this section.
(2)If on any such application the court decides that subsection (3) of section 10 or the requirement in question is not satisfied or, as the case may be, that the organisation has failed to comply with the obligation in question it may order the organisation to take such steps as the court directs for securing that that subsection or requirement is satisfied or that that obligation is complied with.
(3)The jurisdiction conferred by this section shall be exercisable by the High Court and the Court of Session.
13Alteration of rules for protection of investors
(1)If at any time it appears to the Secretary of State that the rules of a recognised organisation do not satisfy the requirements of paragraph 3(1) of Schedule 2 to this Act he may, instead of revoking the recognition order or making an application under section i2 above, direct the organisation to alter, or himself alter, its rules in such manner as he considers necessary for securing that the rules satisfy those requirements.
(2)If at any time it appears to the Secretary of State that the rules or practices of a recognised organisation which is concerned with two or more kinds of investment business do not satisfy any requirement of Schedule 2 to this Act in respect of investment business of any of those kinds he may, instead of revoking the recognition order or making an application under section 12 above, direct the organisation to alter, or himself alter, its rules so that they preclude a member from carrying on investment business of that kind unless he is an authorised person otherwise than by virtue of membership of the organisation or an exempted person in respect of that business.
(3)Any direction given under this section shall, on the application of the Secretary of State, be enforceable by mandamus or, in Scotland, by an order for specific performance under section 91 of the Court of Session Act 1868.
(4)Before giving a direction or making any alteration under subsection (1) above the Secretary of State shall consult the organisation concerned.
(5)A recognised organisation whose rules have been altered by or pursuant to a direction given by the Secretary of State under subsection (1) above may apply to the court and if the court is satisfied—
(a)that the rules without the alteration satisfied the requirements mentioned in that subsection; or
(b)that other alterations proposed by the organisation would result in the rules satisfying those requirements, the court may set aside the alteration made by or pursuant to the direction given by the Secretary of State and, in a case within paragraph (b) above, order the organisation to make the alterations proposed by it; but the setting aside of an alteration under this subsection shall not affect its previous operation.
(6)The jurisdiction conferred by subsection (5) above shall be exercisable by the High Court and the Court of Session.
(7)Section 11(2) to (7) and (9) above shall, with the necessary modifications, have effect in relation to any direction given or alteration made by the Secretary of State under subsection (2) above as they have effect in relation to an order revoking a recognition order.
(8)The fact that the rules of a recognised organisation have been altered by or pursuant to a direction given by the Secretary of State or pursuant to an order made by the court under this section shall not preclude their subsequent alteration or revocation by that organisation.
14Notification requirements
(1)The Secretary of State may make regulations requiring a recognised organisation to give him forthwith notice of the occurrence of such events relating to the organisation or its members as are specified in the regulations and such information in respect of those events as is so specified.
(2)The Secretary of State may make regulations requiring a recognised organisation to furnish him at such times or in respect of such periods as are specified in the regulations with such information relating to the organisation or its members as is so specified.
(3)The notices and information required to be given or furnished under the foregoing provisions of this section shall be such as the Secretary of State may reasonably require for the exercise of his functions under this Act
(4)Regulations under the foregoing provisions of this section may require information to be given in a specified form and to be verified in a specified manner.
(5)Any notice or information required to be given or furnished under the foregoing provisions of this section shall be given in writing or in such other manner as the Secretary of State may approve.
(6)Where a recognised organisation amends, revokes or adds to its rules or guidance it shall within seven days give the Secretary of State written notice of the amendment, revocation or addition; but notice need not be given of the revocation of guidance other than such as is mentioned in section 9(6) above or of any amendment of or addition to guidance which does not result in or consist of such guidance as is there mentioned.
(7)Contravention of, or of regulations under, this section shall not be an offence.
Persons authorised by recognised professional bodies

15Authorisation by certification by recognised professional body
(1)A person holding a certificate issued for the purposes of this Part of this Act by a recognised professional body is an authorised person.
(2)Such a certificate may be issued by a recognised professional body to an individual, a body corporate, a partnership or an unincorporated association.
(3)A certificate issued to a partnership—
(a)shall be issued in the partnership name; and
(b)shall authorise the carrying on of investment business in that name by the partnership to which the certificate is issued, by any partnership which succeeds to that business or by any person who succeeds to that business having previously carried it on in partnership; and, in relation to a certificate issued to a partnership constituted under the law of England and Wales or Northern Ireland or the law of any other country or territory under which a partnership is not a legal person, references in this Act to the person who holds the certificate or is certified shall be construed as references to the persons or person for the time being authorised by the certificate to carry on investment business as mentioned in paragraph (b) above.
16Professional bodies
(1)In this Act a "professional body" means a body which regulates the practice of a profession and references to the practice of a profession do not include references to carrying on a business consisting wholly or mainly of investment business.
(2)In this Act references to the members of a professional body are references to individuals who, whether or not members of the body, are entitled to practise the profession in question and, in practising it, are subject to the rules of that body.
(3)In this Act references to the rules of a professional body are references to the rules (whether or not laid down by the body itself) which the body has power to enforce in relation to the practice of the profession in question and the carrying on of investment business by persons practising that profession or which relate to the grant, suspension or withdrawal of certificates under section 15 above, the admission and expulsion of members or otherwise to the constitution of the body.
(4)In this Act references to guidance issued by a professional body are references to guidance issued or any recommendation made by it to all or any class of its members or persons seeking to become members, or to persons or any class of persons who are or are seeking to be certified by the body, and which would, if it were a rule, fall within subsection (3) above.
17Applications for recognition
(1)A professional body may apply to the Secretary of State for an order declaring it to be a recognised professional body for the purposes of this Act.
(2)Subsections (2) to (6) of section 9 above shall have effect in relation to an application under subsection (1) above as they have effect in relation to an application under subsection (1) of that section.
18Grant and refusal of recognition
(1)The Secretary of State may, on an application duly made in accordance with section 17 above and after being furnished with all such information as he may require under that section, make or refuse to make an order ("a recognition order") declaring the applicant to be a recognised professional body.
(2)The Secretary of State may make a recognition order if it appears to him from the information furnished by the body making the application and having regard to any other information in his possession that the requirements of subsection (3) below and of Schedule 3 to this Act are satisfied as respects that body.
(3)The body must have rules which impose acceptable limits on the kinds of investment business which may be carried on by persons certified by it and the circumstances in which they may carry on such business and which preclude a person certified by that body from carrying on any investment business outside those limits unless he is an authorised person otherwise than by virtue of the certification or an exempted person in respect of that business.
(4)Where the Secretary of State refuses an application for a recognition order he shall give the applicant a written notice to that effect, stating the reasons for the refusal.
(5)A recognition order shall state the date on which it takes effect.
19Revocation of recognition
(1)A recognition order under section 18 above may be revoked by a further order made by the Secretary of State if at any time it appears to him—
(a)that section 18(3) above or any requirement of Schedule 3 to this Act is not satisfied in the case of the body to which the recognition order relates; or
(b)that the body has failed to comply with any obligation to which it is subject by virtue of this Act.
(2)Subsections (2) to (9) of section 11 above shall have effect in relation to the revocation of a recognition order under this section as they have effect in relation to the revocation of a recognition order under subsection (1) of that section.
20Compliance orders
(1)If at any time it appears to the Secretary of State—
(a)that subsection (3) of section 18 above or any requirement of Schedule 3 to this Act is not satisfied in the case of a recognised professional body; or
(b)that such a body has failed to comply with any obligation to which it is subject by virtue of this Act, he may, instead of revoking the recognition order under section 19 above, make an application to the court under this section.
(2)If on any such application the court decides that subsection (3) of section 18 above or the requirement in question is not satisfied or, as the case may be, that the body has failed to comply with the obligation in question it may order the body to take such steps as the court directs for securing that that subsection or requirement is satisfied or that that obligation is complied with.
(3)The jurisdiction conferred by this section shall be exercisable by the High Court and the Court of Session.
21Notification requirements
(1)The Secretary of State may make regulations requiring a recognised professional body to give him forthwith notice of the occurrence of such events relating to the body, its members or persons certified by it as are specified in the regulations and such information in respect of those events as is so specified.
(2)The Secretary of State may make regulations requiring a recognised professional body to furnish him at such times or in respect of such periods as are specified in the regulations with such information relating to the body, its members and persons certified by it as is so specified.
(3)The notices and information required to be given or furnished under the foregoing provisions of this section shall be such as the Secretary of State may reasonably require for the exercise of his functions under this Act.
(4)Regulations under the foregoing provisions of this section may require information to be given in a specified form and to be verified in a specified manner.
(5)Any notice or information required to be given or furnished under the foregoing provisions of this section shall be given in writing or in such other manner as the Secretary of State may approve.
(6)Where a recognised professional body amends, revokes or adds to its rules or guidance it shall within seven days give the Secretary of State written notice of the amendment, revocation or addition; but—
(a)notice need not be given of the revocation of guidance other than such as is mentioned in section 9(6) above or of any amendment of or addition to guidance which does not result in or consist of such guidance as is there mentioned; and
(b)notice need not be given in respect of any rule or guidance, or rules or guidance of any description, in the case of which the Secretary of State has waived compliance with this subsection by notice in writing to the body concerned; and any such waiver may be varied or revoked by a further notice in writing.
(7)Contravention of, or of regulations under, this section shall not be an offence.
Insurance companies

22Authorised insurers
A body which is authorised under section 3 or 4 of the Insurance Companies Act 1982 to carry on insurance business which is investment business and carries on such insurance business in the United Kingdom is an authorised person as respects—
(a)any insurance business which is investment business; and
(b)any other investment business which that body may carry on without contravening section 16 of that Act
Friendly societies

23Registered friendly societies
(1)A society which—
(a)is a friendly society within the meaning of section 7(l)(a) of the Friendly Societies Act 1974 ;
(b)is registered within the meaning of that Act as a society but not as a branch of a society ;
(c)under its rules has its registered office at a place situated in Great Britain ; and
(d)carries on investment business in the United Kingdom, is an authorised person as respects any investment business which it carries on for or in connection with any of the purposes mentioned in Schedule 1 to that Act
(2)A society which—
(a)is a friendly society within the meaning of section 1(l)(a) of the Friendly Societies Act (Northern Ireland) 1970;
(b)is registered or deemed to be registered as a society but not as a branch of a society under that Act;
(c)under its rules has its registered office at a place situated in Northern Ireland ; and
(d)carries on investment business in the United Kingdom, is an authorised person as respects any investment business which it carries on for or in connection with any of the purposes mentioned in Schedule 1 to that Act.
Collective investment schemes

24Operators and trustees of recognised schemes
The operator or trustee of a scheme recognised under section 86 below is an authorised person as respects—
(a)investment business which consists in operating or acting as trustee in relation to that scheme; and
(b)any investment business which is carried on by him in connection with or for the purposes of that scheme.
Persons authorised by the Secretary of State

25Authorisation by Secretary of State
A person holding an authorisation granted by the Secretary of State under the following provisions of this Chapter is an authorised person.
26Applications for authorisation
(1)An application for authorisation by the Secretary of State may be made by—
(a)an individual;
(b)a body corporate;
(c)a partnership; or
(d)an unincorporated association.
(2)Any such application—
(a)shall be made in such manner as the Secretary of State may direct;
(b)shall contain or be accompanied by—
(i)information as to the investment business which the applicant proposes to carry on and the services which he will hold himself out as able to provide in the carrying on of that business ; and
(ii)such other information as the Secretary of State may reasonably require for the purpose of determining the application; and
(c)shall contain the address of a place in the United Kingdom for the service on the applicant of any notice or other document required or authorised to be served on him under this Act.
(3)At any time after receiving an application and before determining it the Secretary of State may require the applicant to furnish additional information.
(4)The directions and requirements given or imposed under subsections (2) and (3) above may differ as between different applications.
(5)Any information to be furnished to the Secretary of State under this section shall, if he so requires, be in such form or verified in such manner as he may specify.
27Grant and refusal of authorisation
(1)The Secretary of State may, on an application duly made in accordance with section 26 above and after being furnished with all such information as he may require under that section, grant or refuse the application.
(2)The Secretary of State shall grant the application if it appears to him from the information furnished by the applicant and having regard to any other information in his possession that the applicant is a fit and proper person to carry on the investment business and provide the services described in the application.
(3)In determining whether to grant or refuse an application the Secretary of State may take into account any matter relating to any person who is or will be employed by or associated with the applicant for the purposes of the business in question, to any person who is or will be acting as an appointed representative in relation to that business and—
(a)if the applicant is a body corporate, to any director or controller of the body, to any other body corporate in the same group or to any director or controller of any such other body corporate ;
(b)if the applicant is a partnership, to any of the partners ;
(c)if the applicant is an unincorporated association, to any member of the governing body of the association or any officer or controller of the association.
(4)In determining whether to grant or refuse an application the Secretary of State may also have regard to any business which the applicant proposes to carry on in connection with his investment business.
(5)In the case of an applicant who is authorised to carry on investment business in a member State other than the United Kingdom the Secretary of State shall have regard to that authorisation.
(6)An authorisation granted to a partnership—
(a)shall be granted in the partnership name ; and
(b)shall authorise the carrying on of investment business in that name (or with the Secretary of State's consent in any other name) by the partnership to which the authorisation is granted, by any partnership which succeeds to that business or by any person who succeeds to that business having previously carried it on in partnership; and, in relation to an authorisation granted to a partnership constituted under the law of England and Wales or Northern Ireland or the law of any other country or territory under which a partnership is not a legal person, references in this Act to the holder of the authorisation or the authorised person shall be construed as references to the persons or person for the time being authorised by the authorisation to carry on investment business as mentioned in paragraph (b) above.
(7)An authorisation granted to an unincorporated association shall apply to the carrying on of investment business in the name of the association and in such manner as may be specified in the authorisation.
(8)The Secretary of State shall give an applicant for authorisation written notice of the grant of authorisation specifying the date on which it takes effect
28Withdrawal and suspension of authorisation
(1)The Secretary of State may at any time withdraw or suspend any authorisation granted by him if it appears to him—
(a)that the holder of the authorisation is not a fit and proper person to carry on the investment business which he is carrying on or proposing to carry on; or
(b)without prejudice to paragraph (a) above, that the holder of the authorisation has contravened any provision of this Act or any rules or regulations made under it or, in purported compliance with any such provision, has furnished the Secretary of State with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under this Act.
(2)For the purposes of subsection (l)(a) above the Secretary of State may take into account any such matters as are mentioned in section 27 (3) and (4) above.
(3)Where the holder of the authorisation is a member of a recognised self-regulating organisation the rules, prohibitions and requirements referred to in paragraph (b) of subsection (1) above include the rules of that organisation and any prohibition or requirement imposed by virtue of those rules; and where he is a person certified by a recognised professional body the rules, prohibitions and requirements referred to in that paragraph include the rules of that body which regulate the carrying on by him of investment business and any prohibition or requirement imposed by virtue of those rules.
(4)The suspension of an authorisation shall be for a specified period or until the occurrence of a specified event or until specified conditions are complied with; and while an authorisation is suspended the holder shall not be an authorised person.
(5)Any period, event or conditions specified under subsection (4) above in the case of an authorisation may be varied by the Secretary of State on the application of the holder.
29Notice of proposed refusal, withdrawal or suspension
(1)Where the Secretary of State proposes—
(a)to refuse an application under section 26 or 28(5) above ; or
(b)to withdraw or suspend an authorisation, he shall give the applicant or the authorised person written notice of his intention to do so, stating the reasons for which he proposes to act.
(2)In the case of a proposed withdrawal or suspension the notice shall state the date on which it is proposed that the withdrawal or suspension should take effect and, in the case of a proposed suspension, its proposed duration.
(3)Where the reasons stated in a notice under this section relate specifically to matters which—
(a)refer to a person identified in the notice other than the applicant or the holder of the authorisation; and
(b)are in the opinion of the Secretary of State prejudicial to that person in any office or employment, the Secretary of State shall, unless he considers it impracticable to do so, serve a copy of the notice on that person.
(4)A notice under this section shall give particulars of the right to require the case to be referred to the Tribunal under Chapter IX of this Part of this Act.
(5)Where a case is not required to be referred to the Tribunal by a person on whom a notice is served under this section the Secretary of State shall, at the expiration of the period within which such a requirement can be made—
(a)give that person written notice of the refusal, withdrawal or suspension; or
(b)give that person written notice of the grant of the application or, as the case may be, written notice that the authorisation is not to be withdrawn or suspended; and the Secretary of State may give public notice of any decision notified by him under paragraph (a) or (b) above and the reasons for the decision except that he shall not do so in the case of a decision notified under paragraph (b) unless the person concerned consents to his doing so.
30Withdrawal of applications and authorisations by consent
(1)An application under section 26 above may be withdrawn before it is granted or refused ; and, subject to subsections (2) and (3) below, an authorisation granted under section 27 above may be withdrawn by the Secretary of State at the request or with the consent of the authorised person.
(2)The Secretary of State may refuse to withdraw any such authorisation if he considers that the public interest requires any matter affecting the authorised person to be investigated as a preliminary to a decision on the question whether the Secretary of State should in respect of that person exercise his powers under section 28 above or under any other provision of this Part of this Act.
(3)The Secretary of State may also refuse to withdraw an authorisation where in his opinion it is desirable that a prohibition or restriction should be imposed on the authorised person under Chapter VI of this Part of this Act or that a prohibition or restriction imposed on that person under that Chapter should continue in force.
(4)The Secretary of State may give public notice of any withdrawal of authorisation under subsection (1) above.
Persons authorised in other member States

31Authorisation in other member State
(1)A person carrying on investment business in the United Kingdom is an authorised person if—
(a)he is established in a member State other than the United Kingdom;
(b)the law of that State recognises him as a national of that or another member State; and
(c)he is for the time being authorised under that law to carry on investment business or investment business of any particular kind.
(2)For the purposes of this Act a person is established in a member State other than the United Kingdom if his head office is situated in that State and he does not transact investment business from a permanent place of business maintained by him in the United Kingdom.
(3)This section applies to a person only if the provisions of the law under which he is authorised to carry on the investment business in question—
(a)afford to investors in the United Kingdom protection, in relation to his carrying on of that business, which is at least equivalent to that provided for them by the provisions of this Chapter relating to members of recognised self-regulating organisations or to persons authorised by the Secretary of State ; or
(b)satisfy the conditions laid down by a Community instrument for the co-ordination or approximation of the laws, regulations or administrative provisions of member States relating to the carrying on of investment business or investment business of the relevant kind.
(4)A certificate issued by the Secretary of State and for the time being in force to the effect that the provisions of the law of a member State comply with the requirements of subsection (3)(a) above, either as respects all investment business or as respects investment business of a particular kind, shall be conclusive evidence of that matter but the absence or revocation of such a certificate shall not be regarded as indicating that those requirements are not complied with.
(5)This section shall not apply to a person by virtue of paragraph (b) of subsection (3) above unless the authority by which he is authorised to carry on the investment business in question certifies that he is authorised to do so under a law which complies with the requirements of that paragraph.
32Notice of commencement of business
(1)A person who is an authorised person by virtue of section 31 above shall be guilty of an offence unless, not less than seven days before beginning to carry on investment business in the United Kingdom, he has given notice of his intention to do so to the Secretary of State either in writing or in such other manner as the Secretary of State may approve.
(2)The notice shall contain—
(a)information as to the investment business which that person proposes to carry on in the United Kingdom and the services which he will hold himself out as able to provide in the carrying on of that business ;
(b)information as to the authorisation of that person in the member State in question ;
(c)the address of a place (whether in the United Kingdom or elsewhere) for the service on that person of any notice or other document required or authorised to be served on him under this Act;
(d)such other information as may be prescribed ; and the notice shall comply with such requirements as to the form in which any information is to be given and as to its verification as may be prescribed.
(3)A notice by a person claiming to be authorised by virtue of subsection 0)(b) of section 31 above shall be accompanied by a copy of the certificate required by subsection (5) of that section.
(4)A person guilty of an offence under subsection (1) above shall be liable—
(a)on conviction on indictment, to a fine ;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
(5)In proceedings brought against any person for an offence under subsection (1) above it shall be a defence for him to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of the offence.
33Termination and suspension of authorisation
(1)If it appears to the Secretary of State that a person who is an authorised person by virtue of section 31 above has contravened any provision of this Act or of any rules or regulations made under it or, in purported compliance with any such provision, has furnished the Secretary of State with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under this Act the Secretary of State may direct—
(a)that he shall cease to be an authorised person by virtue of that section; or
(b)that he shall not be an authorised person by virtue of that section for a specified period or until the occurrence of a specified event or until specified conditions are complied with.
(2)In the case of a person who is a member of a recognised self-regulating organisation the rules, prohibitions and requirements referred to in subsection (1) above include the rules of that organisation and any prohibition or requirement imposed by virtue of those rules; and in the case of a person who is certified by a recognised professional body the rules, prohibitions and requirements referred to in that subsection include the rules of that body which regulate the carrying on by him of investment business and any prohibition or requirement imposed by virtue of those rules.
(3)Any period, event or condition specified in a direction under subsection (1)(b) above may be varied by the Secretary of State on the application of the person to whom the direction relates.
(4)The Secretary of State shall consult the relevant supervisory authority before giving a direction under this section unless he considers it essential in the interests of investors that the direction should be given forthwith but in that case he shall consult the authority immediately after giving the direction and may then revoke or vary it if he considers it appropriate to do so.
(5)The Secretary of State shall revoke a direction under this section if he is satisfied, after consulting the relevant supervisory authority, that it will secure that the person concerned will comply with the provisions mentioned in subsection (1) above.
(6)In this section " the relevant supervisory authority " means the authority of the member State where the person concerned is established which is responsible for supervising the carrying on of investment business of the kind which that person is or was carrying on.
34Notice of proposed termination or suspension
(1)Where the Secretary of State proposes—
(a)to give a direction under section 33 above ; or
(b)to refuse an application under subsection (3) of that section, he shall give the authorised person written notice of his intention to do so, stating the reasons for which he proposes to act.
(2)In the case of a proposed direction under section 33 above the notice shall state the date on which it is proposed that the direction should take effect and, in the case of a proposed direction under subsection (1)(b) of that section, its proposed duration.
(3)Where the reasons stated in a notice under this section relate specifically to matters which—
(a)refer to a person identified in the notice other than the authorised person; and
(b)are in the opinion of the Secretary of State prejudicial to that person in any office or employment, the Secretary of State shall, unless he considers it impracticable to do so, serve a copy of the notice on that other person.
(4)A notice under this section shall give particulars of the right to require the case to be referred to the Tribunal under Chapter IX of this Part of this Act.
(5)Where a case is not required to be referred to the Tribunal by a person on whom a notice is served under this section the Secretary of State shall, at the expiration of the period within which such a requirement can be made—
(a)give that person written notice of the direction or refusal ; or
(b)give that person written notice that the direction is not to be given or, as the case may be, of the grant of the application; and the Secretary of State may give public notice of any decision notified by him under paragraph (a) or (b) above and the reasons for the decision except that he shall not do so in the case of a decision within paragraph (b) unless the person concerned consents to his doing so.
Chapter IV
Exempted Persons

The Bank of England

35The Bank of England
The Bank of England is an exempted person.
Recognised investment exchanges and clearing houses

36Investment exchanges
(1)A recognised investment exchange is an exempted person as respects anything done in its capacity as such which constitutes investment business.
(2)In this Act references to the rules of an investment exchange are references to the rules made or conditions imposed by it with respect to the matters dealt with in Schedule 4 to this Act, with respect to the admission of persons to or their exclusion from the use of its facilities or otherwise relating to its constitution.
(3)In this Act references to guidance issued by an investment exchange are references to guidance issued or any recommendation made by it to all or any class of its members or users or persons seeking to become members of the exchange or to use its facilities and which would, if it were a rule, fall within subsection (2) above.
37Grant and revocation of recognition
(1)Any body corporate or unincorporated association may apply to the Secretary of State for an order declaring it to be a recognised investment exchange for the purposes of this Act.
(2)Subsections (2) to (5) of section 9 above shall have effect in relation to an application under subsection (1) above as they have effect in relation to an application under subsection (1) of that section; and every application under subsection (1) above shall be accompanied by—
(a)a copy of the applicant's rules;
(b)a copy of any guidance issued by the applicant which is intended to have continuing effect and is issued in writing or other legible form ; and
(c)particulars of any arrangements which the applicant has made or proposes to make for the provision of clearing services.
(3)The Secretary of State may, on an application duly made in accordance with subsection (1) above and after being furnished with all such information as he may require in connection with the application, make or refuse to make an order (" a recognition order ") declaring the applicant to be a recognised investment exchange for the purposes of this Act.
(4)Subject to Chapter XIV of this Part of this Act, the Secretary of State may make a recognition order if it appears to him from the information furnished by the exchange making the application and having regard to any other information in his possession that the requirements of Schedule 4 to this Act are satisfied as respects that exchange.
(5)Where the Secretary of State refuses an application for a recognition order he shall give the applicant a written notice to that effect stating the reasons for the refusal.
(6)A recognition order shall state the date on which it takes effect
(7)A recognition order may be revoked by a further order made by the Secretary of State if at any time it appears to him—
(a)that any requirement of Schedule 4 to this Act is not satisfied in the case of the exchange to which the recognition order relates ; or
(b)that the exchange has failed to comply with any obligation to which it is subject by virtue of this Act; and subsections (2) to (9) of section 11 above shall have effect in relation to the revocation of a recognition order under this subsection as they have effect in relation to the revocation of such an order under subsection (1) of that section.
(8)Section 12 above shall have effect in relation to a recognised investment exchange and the requirements and obligations referred to in subsection (7) above as it has effect in relation to the requirements and obligations there mentioned.
38Clearing houses
(1)A recognised clearing house is an exempted person as respects anything done by it in its capacity as a person providing clearing services for the transaction of investment business.
(2)In this Act references to the rules of a clearing house are references to the rules made or conditions imposed by it with respect to the provision by it or its members of clearing services under clearing arrangements, that is to say, arrangements with a recognised investment exchange for the provision of clearing services in respect of transactions effected on the exchange.
(3)In this Act references to guidance issued by a clearing house are references to guidance issued or any recommendation made by it to all or any class of its members or persons using or seeking to use its services and which would, if it were a rule, fall within subsection (2) above.
39Grant and revocation of recognition
(1)Any body corporate or unincorporated association may apply to the Secretary of State for an order declaring it to be a recognised clearing house for the purposes of this Act.
(2)Subsections (2) to (5) of section 9 above shall have effect in relation to an application under subsection (1) above as they have effect in relation to an application under subsection (1) of that section ; and any application under subsection (1) above shall be accompanied by—
(a)a copy of the applicant's rules;
(b)a copy of any guidance issued by the applicant which is intended to have continuing effect and is issued in writing or other legible form; and
(c)particulars of any recognised investment exchange with which the applicant proposes to make clearing arrangements and of any other person (whether or not such an exchange) for whom the applicant provides clearing services.
(3)The Secretary of State may, on an application duly made in accordance with subsection (1) above and after being furnished with all such information as he may require in connection with the application, make or refuse to make an order (" a recognition order ") declaring the applicant to be a recognised clearing house for the purposes of this Act.
(4)Subject to Chapter XIV of this Part of this Act, the Secretary of State may make a recognition order if it appears to him from the information furnished by the clearing house making the application and having regard to any other information in his possession that the clearing house—
(a)has financial resources sufficient for the proper performance of its functions;
(b)has adequate arrangements and resources for the effective monitoring and enforcement of compliance with its rules or, as respects monitoring, arrangements providing for that function to be performed on behalf of the clearing house (and without affecting its responsibility) by another body or person who is able and willing to perform it;
(c)provides or is able to provide clearing services which would enable a recognised investment exchange to make arrangements with it that satisfy the requirements of Schedule 4 to this Act; and
(d)is able and willing to comply with duties corresponding to those imposed in the case of a recognised investment exchange by paragraph 5 of that Schedule.
(5)Where the Secretary of State refuses an application for a recognition order he shall give the applicant a written notice to that effect stating the reasons for the refusal.
(6)A recognition order shall state the date on which it takes effect
(7)A recognition order may be revoked by a further order made by the Secretary of State if at any time it appears to him—
(a)that any requirement of subsection (4) above is not satisfied in the case of the clearing house ; or
(b)that the clearing house has failed to comply with any obligation to which it is subject by virtue of this Act; and subsections (2) to (9) of section 11 above shall have effect in relation to the revocation of a recognition order under this subsection as they have effect in relation to the revocation of such an order under subsection (1) of that section.
(8)Section 12 above shall have effect in relation to a recognised clearing house and the requirements and obligations referred to in subsection (7) above as it has effect in relation to the requirements and obligations there mentioned.
40Overseas investment exchanges and clearing houses
(1)Any application under section 37(1) or 39(1) above by a body or association whose head office is situated in a country outside the United Kingdom shall contain the address of a place in the United Kingdom for the service on that body or association of notices or other documents required or authorised to be served on it under this Act.
(2)In relation to any such body or association sections 37(4) and 39(4) above shall have effect with the substitution for the requirements there mentioned of the following requirements, that is to say—
(a)that the body or association is, in the country in which its head office is situated, subject to supervision which, together with the rules and practices of that body or association, is such that investors in the United Kingdom are afforded protection in relation to that body or association at least equivalent to that provided by the provisions of this Act in relation to investment exchanges and clearing houses in respect of which recognition orders are made otherwise than by virtue of this subsection ; and
(b)that the body or association is able and willing to cooperate, by the sharing of information and otherwise, with the authorities, bodies and persons responsible in the United Kingdom for the supervision and regulation of investment business or other financial services; and
(c)that adequate arrangements exist for such co-operation between those responsible for the supervision of the body or association in the country mentioned in paragraph (a) above and the authorities, bodies and persons mentioned in paragraph (b) above.
(3)In determining whether to make a recognition order by virtue of subsection (2) above the Secretary of State may have regard to the extent to which persons in the United Kingdom and persons in the country mentioned in that subsection have access to the financial markets in each others' countries.
(4)In relation to a body or association declared to be a recognised investment exchange or recognised clearing house by a recognition order made by virtue of subsection (2) above—
(a)the reference in section 36(2) above to the matters dealt with in Schedule 4 to this Act shall be construed as a reference to corresponding matters ;
(b)sections 37(7) and (8) and 39(7) and (8) above shall have effect as if the requirements mentioned in section 37(7)(fl) and in section 39(7)(a) were those of subsection (2)(a) and (b) above ; and
(c)the grounds on which the order may be revoked under section 37(7) or 39(7) above shall include the ground that it appears to the Secretary of State that revocation is desirable in the interests of investors and potential investors in the United Kingdom.
(5)In this section " country " includes any territory or any part of a country or territory.
(6)A body or association declared to be a recognised investment exchange or recognised clearing house by a recognition order made by virtue of subsection (2) above is in this Act referred to as an " overseas investment exchange " or an " overseas clearing house ".
41Notification requirements
(1)The Secretary of State may make regulations requiring a recognised investment exchange or recognised clearing house to give him forthwith notice of the occurrence of such events relating to the exchange or clearing house as are specified in the regulations and such information in respect of those events as is so specified.
(2)The Secretary of State may make regulations requiring a recognised investment exchange or recognised clearing house to furnish him at such times or in respect of such periods as are specified in the regulations with such information relating to the exchange or clearing house as is so specified.
(3)The notices and information required to be given or furnished under the foregoing provisions of this section shall be such as the Secretary of State may reasonably require for the exercise of his functions under this Act.
(4)Regulations under the foregoing provisions of this section may require information to be given in a specified form and to be verified in a specified manner.
(5)Where a recognised investment exchange—
(a)amends, revokes or adds to its rules or guidance; or
(b)makes, terminates or varies any clearing arrangements. it shall within seven days give written notice to the Secretary of State of the amendment, revocation or addition or, as the case may be, of the matters mentioned in paragraph (b) above.
(6)Where a recognised clearing house—
(a)amends, revokes or adds to its rules or guidance ; or
(b)makes a change in the persons for whom it provides clearing services, it shall within seven days give written notice to the Secretary of State of the amendment, revocation or addition or, as the case may be, of the change.
(7)Notice need not be given under subsection (5) or (6) above of the revocation of guidance other than such as is mentioned in section 37(2)(b) or 39(2)(b) above or of any amendment of or addition to guidance which does not result in or consist of such guidance as is there mentioned.
Other exemptions

42Lloyd's
The Society of Lloyd's and persons permitted by the Council of Lloyd's to act as underwriting agents at Lloyd's are exempted persons as respects investment business carried on in connection with or for the purpose of insurance business at Lloyd's.
43Listed money market institutions
(1)A person for the time being included in a list maintained by the Bank of England for the purposes of this section (" a listed institution ") is an exempted person in respect of, and of anything done for the purposes of, any transaction to which Part I or Part II of Schedule 5 to this Act applies and in respect of any arrangements made by him with a view to other persons entering into a transaction to which Part III of that Schedule applies.
(2)The conditions imposed by the Bank of England for admission to the list referred to in this section and the arrangements made by it for a person's admission to and removal from the list shall require the approval of the Treasury; and this section shall cease to have effect if that approval is withdrawn but without prejudice to its again having effect if approval is given for fresh conditions or arrangements.
(3)The Bank of England shall publish the list as for the time being in force and provide a certified copy of it at the request of any person wishing to refer to it in legal proceedings.
(4)Such a certified copy shall be evidence or, in Scotland, sufficient evidence of the contents of the list; and a copy purporting to be certified by or on behalf of the Bank shall be deemed to have been duly certified unless the contrary is shown.
44Appointed representatives
(1)An appointed representative is an exempted person as respects investment business carried on by him as such a representative.
(2)For the purposes of this Act an appointed representative is a person—
(a)who is employed by an authorised person (his " principal ") under a contract for services which—
(i)requires or permits him to carry on investment business to which this section applies; and
(ii)complies with subsections (4) and (5) below; and
(b)for whose activities in carrying on the whole or part of that investment business his principal has accepted responsibility in writing; and the investment business carried on by an appointed representative as such is the investment business for which his principal has accepted responsibility.
(3)This section applies to investment business carried on by an appointed representative which consists of—
(a)procuring or endeavouring to procure the persons with whom he deals to enter into investment agreements With his principal or (if not prohibited by his contract) with other persons;
(b)giving advice to the persons with whom he deals about entering into investment agreements with his principal or (if not prohibited by his contract) with other persons; or
(c)giving advice as to the sale of investments issued by his principal or as to the exercise of rights conferred by an investment whether or not issued as aforesaid.
(4)If the contract between an appointed representative and his principal does not prohibit the representative from procuring or endeavouring to procure persons to enter into investment agreements with persons other than his principal it must make provision for enabling the principal either to impose such a prohibition or to restrict the kinds of investment to which those agreements may relate or the other persons with whom they may be entered into.
(5)If the contract between an appointed representative and his principal does not prohibit the representative from giving advice about entering into investment agreements with persons other than his principal it must make provision for enabling the principal either to impose such a prohibition or to restrict the kinds of advice which the representative may give by reference to the kinds of investment in relation to which or the persons with whom the representative may advise that investment agreements should be made.
(6)The principal of an appointed representative shall be responsible, to the same extent as if he had expressly authorised it, for anything said or done or omitted by the representative in carrying on the investment business for which he has accepted responsibility.
(7)In determining whether an authorised person has complied with—
(a)any provision contained in or made under this Act; or
(b)any rules of a recognised self-regulating organisation or recognised professional body, anything which a person who at the material time is or was an appointed representative of the authorised person has said, done or omitted as respects investment business for which the authorised person has accepted responsibility shall be treated as having been said, done or omitted by the authorised person.
(8)Nothing in subsection (7) above shall cause the knowledge or intentions of an appointed representative to be attributed to his principal for the purpose of determining whether the principal has committed a criminal offence unless in all the circumstances it is reasonable for them to be attributed to him.
(9)In this Act " investment agreement" means any agreement the making or performance of which by either party constitutes an activity which falls within any paragraph of Part II of Schedule 1 to this Act or would do so apart from Parts III and IV of that Schedule.
45Miscellaneous exemptions
(1)Each of the following persons is an exempted person to the extent specified in relation to that person—
(a)the President of the Family Division of the High Court when acting in the exercise of his functions under section 9 of the Administration of Estates Act 1925 ;
(b)the Probate Judge of the High Court of Northern Ireland when acting in the exercise of his functions under section 3 of the Administration of Estates Act (Northern Ireland) 1955;
(c)the Accountant General of the Supreme Court when acting in the exercise of his functions under Part VI of the Administration of Justice Act 1982 ;
(d)the Accountant of Court when acting in the exercise of his functions in connection with the consignation or deposit of sums of money;
(e)the Public Trustee when acting in the exercise of his functions under the Public Trustee Act 1906;
(f)the Master of the Court of Protection when acting in the exercise of his functions under Part VII of the Mental Health Act 1983 ;
(g)the Official Solicitor to the Supreme Court when acting as judicial trustee under the Judicial Trustees Act 1896;
(h)a registrar of a county court when managing funds paid into court;
(i)a sheriff clerk when acting in the exercise of his functions in connection with the consignation or deposit of sums of money;
(j)a person acting in his capacity as manager of a fund established under section 22 of the Charities Act 1960, section 25 of the Charities Act (Northern Ireland) 1964, section 11 of the Trustee Investments Act 1961 or section 42 of the Administration of Justice Act 1982;
(k)the Central Board of Finance of the Church of England or a Diocesan Authority within the meaning of the Church Funds Investment Measure 1958 when acting in the exercise of its functions under that Measure;
(l)a person acting in his capacity as an official receiver within the meaning of section 399 of the Insolvency Act 1986 or in that capacity within the meaning of any corresponding provision in force in Northern Ireland.
(2)Where a bankruptcy order is made in respect of an authorised person or of a person whose authorisation is suspended under section 28 above or who is the subject of a direction under section 33(1)(b) above or a winding-up order is made in respect of a partnership which is such a person, the trustee in bankruptcy or liquidator acting in his capacity as such is an exempted person but—
(c)sections 48 to 71 below and, so far as relevant to any of those provisions, Chapter IX of this Part of this Act; and
(b)sections 104, 105 and 106 below, shall apply to him to the same extent as they applied to the bankrupt or partnership and, if the bankrupt or partnership was subject to the rules of a recognised self-regulating organisation or recognised professional body, he shall himself also be subject to those rules.
(3)In the application of subsection (2) above to Scotland—
(a)for the reference to a bankruptcy order being made in respect of a person there shall be substituted a reference to the estate of that person being sequestrated ;
(b)the reference to a winding-up order in respect of a partnership is a reference to such an order made under section 72 below;
(c)for the reference to the trustee in bankruptcy there shall be substituted a reference to the interim trustee or permanent trustee within the meaning of the Bankruptcy (Scotland) Act 1985 ; and
(d)for the references to the bankrupt there shall be substituted references to the debtor.
(4)In the application of subsection (2) above to Northern Ireland for the reference to a bankruptcy order there shall be substituted a reference to an order of adjudication of bankruptcy and the reference to a trustee in bankruptcy shall include a reference to an assignee in bankruptcy.
Supplemental

46Power to extend or restrict exemptions
(1)The Secretary of State may by order provide—
(a)for exemptions additional to those specified in the foregoing provisions of this Chapter; or
(b)for removing or restricting any exemption conferred by section 42, 43 or 45 above; and any such order may contain such transitional provisions as the Secretary of State thinks necessary or expedient.
(2)An order making such provision as is mentioned in paragraph (a) of subsection (1) above shall be subject to annulment in pursuance of a resolution of either House of Parliament; and no order making such provision as is mentioned in paragraph (b) of that subsection shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
Chapter V
Conduct of Investment Business

47Misleading statements and practices
(1)Any person who—
(a)makes a statement, promise or forecast which he knows to be misleading, false or deceptive or dishonestly conceals any material facts; or
(b)recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive, is guilty of an offence if he makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not the person to whom the statement, promise or forecast is made or from whom the facts are concealed) to enter or offer to enter into, or to refrain from entering or offering to enter into, an investment agreement or to exercise, or refrain from exercising, any rights conferred by an investment.
(2)Any person who does any act or engages in any course of conduct which creates a false or misleading impression as to the market in or the price or value of any investments is guilty of an offence if he does so for the purpose of creating that impression and of thereby inducing another person to acquire, dispose of, subscribe for or underwrite those investments or to refrain from doing so or to exercise, or refrain from exercising, any rights conferred by those investments.
(3)In proceedings brought against any person for an offence under subsection (2) above it shall be a defence for him to prove that he reasonably believed that his act or conduct would not create an impression that was false or misleading as to the matters mentioned in that subsection.
(4)Subsection (1) above does not apply unless—
(a)the statement, promise or forecast is made in or from or the facts are concealed in or from, the United Kingdom;
(b)the person on whom the inducement is intended to or may have effect is in the United Kingdom; or
(c)the agreement is or would be entered into or the rights are or would be exercised in the United Kingdom.
(5)Subsection (2) above does not apply unless—
(a)the act is done or the course of conduct is engaged in in the United Kingdom; or
(b)the false or misleading impression is created there.
(6)A person guilty of an offence under this section shall be liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding seven years or to a fine or to both;
(b)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
48Conduct of business rules
(1)The Secretary of State may make rules regulating the conduct of investment business by authorised persons but those rules shall not apply to members of a recognised self-regulating organisation or persons certified by a recognised professional body in respect of investment business in the carrying on of which they are subject to the rules of the organisation or body.
(2)Rules under this section may in particular make provision—
(a)prohibiting a person from carrying on, or holding himself out as carrying on—
(i)investment business of any kind specified in the rules; or
(ii)investment business of a kind or on a scale other than that notified by him to the Secretary of State in connection with an application for authorisation under Chapter III of this Part of this Act. in a notice under section 32 above or in accordance with any provision of the rules or regulations in that behalf;
(b)prohibiting a person from carrying on investment business in relation to persons other than those of a specified class or description;
(c)regulating the manner in which a person may hold himself out as carrying on investment business;
(d)regulating the manner in which a person makes a market in any investments;
(e)as to the form and content of advertisements in respect of investment business;
(f)requiring the principals of appointed representatives to impose restrictions on the investment business carried on by them;
(g)requiring the disclosure of the amount or value, or of arrangements for the payment or provision, of commissions or other inducements in connection with investment business and restricting the matters by reference to which or the manner in which their amount or value may be determined ;
(h)enabling or requiring information obtained by an authorised person in die course of carrying on one part of his business to be withheld by him from persons with whom he deals in the course of carrying on another part and for that purpose enabling or requiring persons employed in one part of that business to withhold information from those employed in another part;
(i)as to the circumstances and manner in which and the time when or the period during which action may be taken for the purpose of stabilising the price of investments of any specified description ;
(j)for arrangements for the settlement of disputes;
(k)requiring the keeping of accounts and other records, as to their form and content and for their inspection;
(l)requiring a person to whom the rules apply to make provision for the protection of investors in the event of the cessation of his investment business in consequence of his death, incapacity or otherwise.
(3)Subsection (2) above is without prejudice to the generality of subsection (1) above and accordingly rules under this section may make provision for matters other than those mentioned in subsection (2) or further provision as to any of the matters there mentioned except that they shall not impose limits on the amount or value of commissions or other inducements paid or provided in connection with investment business.
(4)Rules under this section may also regulate or prohibit the carrying on in connection with investment business of any other business or the carrying on of any other business which is held out as being for the purposes of investment.
(5)In paragraph (e) of subsection (2) above " advertisement" does not include any advertisement which is subject to section 154 below or which is required or permitted to be published by listing rules under Part IV of this Act and relates to securities which have been admitted to listing under that Part; and rules under that paragraph shall have effect subject to the provisions of Part V of this Act.
(6)Nothing done in conformity with rules made under paragraph (h) of subsection (2) above shall be regarded as a contravention of section 47 above.
(7)Section 47(2) above shall not be regarded as contravened by anything done for the purpose of stabilising the price of investments if it is done in conformity with rules made under this section and—
(a)in respect of investments which fall within any of paragraphs 1 to 5 of Schedule 1 to this Act and are specified by the rules; and
(b)during such period before or after the issue of those investments as is specified by the rules.
(8)The Secretary of State may by order amend subsection (7) above—
(a)by restricting or extending the kinds of investment to which it applies;
(b)by restricting it so as to apply only in relation to the issue of investments in specified circumstances or by extending it, in respect of investments of any kind specified in the order, so as to apply to things done during a specified period before or after events other than the issue of those investments.
(9)No order shall be made under subsection (8) above unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
(10)Rules under this section may contain such incidental and transitional provisions as the Secretary of State thinks necessary or expedient.
49Financial resources rules
(1)The Secretary of State may make rules requiring persons authorised to carry on investment business by virtue of section 25 or 31 above to have and maintain in respect of that business such financial resources as are required by the rules.
(2)Without prejudice to the generality of subsection (1) above, rules under this section may—
(a)impose requirements which are absolute or which are to vary from time to time by reference to such factors as are specified in or determined in accordance with the rules;
(b)impose requirements which take account of any business (whether or not investment business) carried on by the person concerned in conjunction with or in addition to the business mentioned in subsection (1) above;
(c)make provision as to the assets, liabilities and other matters to be taken into account in determining a person's financial resources for the purposes of the rules and the extent to which and the manner in which they are to be taken into account for that purpose.
50Modification of conduct of business and financial resources rules for particular cases
(1)The Secretary of State may, on the application of any person to whom any rules made under section 48 or 49 above apply, alter the requirements of the rules so as to adapt them to the circumstances of that person or to any particular kind of business carried on or to be carried on by him.
(2)The Secretary of State shall not exercise the powers conferred by subsection (1) above in any case unless it appears to him that—
(a)compliance with the requirements in question would be unduly burdensome for the applicant having regard to the benefit which compliance would confer on investors ; and
(b)the exercise of those powers will not result in any undue risk to investors.
(3)The powers conferred by subsection (1) above may be exercised unconditionally or subject to conditions.
51Cancellation rules
(1)The Secretary of State may make rules for enabling a person who has entered or offered to enter into an investment agreement with an authorised person to rescind the agreement or withdraw the offer within such period and in such manner as may be prescribed.
(2)Without prejudice to the generality of subsection (1) above, rules under this section may make provision—
(a)for requiring the service of notices with respect to the rights exercisable under the rules ;
(b)for the restitution of property and the making or recovery of payments where those rights are exercised; and
(c)for such other incidental matters as the Secretary of State thinks necessary or expedient.
52Notification regulations
(1)The Secretary of State may make regulations requiring authorised persons to give him forthwith notice of the occurrence of such events as are specified in the regulations and such information in respect of those events as is so specified.
(2)The Secretary of State may make regulations requiring authorised persons to furnish him at such times or in respect of such periods as are specified in the regulations with such information as is so specified.
(3)Regulations under this section shall not apply to a member of a recognised self-regulating organisation or a person certified by a recognised professional body unless he carries on investment business in the carrying on of which he is subject to any of the rules made under section 48 above.
(4)Without prejudice to the generality of subsections (1) and (2) above, regulations under this section may relate to—
(a)the nature of the investment business being carried on;
(b)the nature of any other business carried on with or for the purposes of the investment business;
(c)any proposal of an authorised person to alter the nature or extent of any business carried on by him ;
(d)any person becoming or ceasing to be a person of the kind to whom regard could be had by the Secretary of State under subsection (3) of section 27 above in deciding an application for authorisation under that section;
(e)the financial position of an authorised person as respects his investment business or any other business carried on by him;
(f)any property managed, and any property or money held, by an authorised person on behalf of other persons.
(5)Regulations under this section may require information to be given in a specified form and to be verified in a specified manner.
(6)Any notice or information required to be given or furnished under this section shall be given in writing or in such other manner as the Secretary of State may approve.
53Indemnity rules
(1)The Secretary of State may make rules concerning indemnity against any claim in respect of any description of civil liability incurred by an authorised person in connection with his investment business.
(2)Rules under this section shall not apply to a member of a recognised self-regulating organisation or a person certified by a recognised professional body in respect of investment business in the carrying on of which he is subject to the rules of the organisation or body unless that organisation or body has requested that rules under this section should apply to him; and any such request shall not be capable of being withdrawn after rules giving effect to it have been made but without prejudice to the power of the Secretary of State to revoke the rules if he thinks fit.
(3)For the purpose of providing indemnity the rules—
(a)may authorise the Secretary of State to establish and maintain a fund or funds ;
(b)may authorise the Secretary of State to take out and maintain insurance with insurers authorised to carry on insurance business under the law of the United Kingdom or any other member State ;
(c)may require any person to whom the rules apply to take out and maintain insurance with any such insurer.
(4)Without prejudice to the generality of the foregoing provisions, the rules may—
(a)specify the terms and conditions on which, and the extent to which, indemnity is to be available and any circumstances in which the right to it is to be excluded or modified;
(b)provide for the management, administration and protection of any fund maintained by virtue of subsection (3) (a) above and require persons to whom the rules apply to make payments to any such fund ;
(c)require persons to whom the rules apply to make payments by way of premium on any insurance policy maintained by the Secretary of State by virtue of subsection (3)(b) above;
(d)prescribe the conditions which an insurance policy must satisfy for the purposes of subsection (3)(c) above ;
(e)authorise the Secretary of State to determine the amount which the rules require to be paid to him or an insurer, subject to such limits or in accordance with such provisions as may be prescribed by the rules;
(f)specify circumstances in which, where sums are paid by the Secretary of State or an insurer in satisfaction of claims against a person subject to the rules, proceedings may be taken against that person by the Secretary of State or the insurer ;
(g)specify circumstances in which persons are exempt from the rules;
(h)empower the Secretary of State to take such steps as he considers necessary or expedient to ascertain whether or not the rules are being complied with ; and
(i)contain incidental or supplementary provisions.
54Compensation fund
(1)The Secretary of State may by rules establish a scheme for compensating investors in cases where persons who are or have been authorised persons are unable, or likely to be unable, to satisfy claims in respect of any description of civil liability incurred by them in connection with their investment businesses.
(2)Without prejudice to the generality of subsection (1) above, rules under this section may—
(a)provide for the administration of the scheme and, subject to the rules, the determination and regulation of any matter relating to its operation by a body appearing to the Secretary of State to be representative of, or of any class of, authorised persons ;
(b)establish a fund out of which compensation is to be paid;
(c)provide for the levying of contributions from, or from any class of, authorised persons and otherwise for financing the scheme and for the payment of contributions and other money into the fund;
(d)specify the terms and conditions on which, and the extent to which, compensation is to be payable and any circumstances in which the right to compensation is to be excluded or modified ;
(e)provide for treating compensation payable under the scheme in respect of a claim against any person as extinguishing or reducing the liability of that person in respect of the claim and for conferring on the body administering the scheme a right of recovery against that person, being, in the event of his insolvency, a right not exceeding such right, if any, as the claimant would have had in that event; and
(f)contain incidental and supplementary provisions.
(3)A scheme under this section shall not be made so as to apply to persons who are members of a recognised self-regulating organisation except after consultation with that organisation or, except at the request of a recognised professional body, to persons who are certified by it and subject to its rules in carrying on all the investment business carried on by them; and no scheme applying to such persons shall be made unless the Secretary of State is satisfied that the rules establishing it make sufficient provision—
(a)for this administration of the scheme by a body on which the interests of those persons are adequately represented ; and
(b)for securing that the amounts which they are liable to contribute reflect, so far as practicable, the amount of the claims made or likely to be made in respect of those persons.
(4)Where a scheme applies to such persons as are mentioned in subsection (3) above the rules under this section may—
(a)constitute the recognised self-regulating organisation or recognised professional body in question as the body administering the scheme in relation to those persons ;
(b)provide for the levying of contributions from that organisation or body instead of from those persons; and
(c)establish a separate fund for the contributions and compensation payable in respect of those persons, with or without provision for payments and repayments in specified circumstances between that and any other fund established by the scheme.
(5)A request by a recognised professional body under subsection (3) above shall not be capable of being withdrawn after rules giving effect to it have been made but without prejudice to the power of the Secretary of State to revoke the rules if he thinks fit.
(6)Rules may be made—
(a)for England and Wales, under sections 411 and 412 of the Insolvency Act 1986 ;
(b)for Scotland—
(i)under the said section 411; and
(ii)in relation to the application of this section where the persons who are or have been authorised persons are persons whose estates may be sequestrated under the Bankruptcy (Scotland) Act 1985, by the Secretary of State under this section; and
(c)for Northern Ireland, under Article 613 of the Companies (Northern Ireland) Order 1986 and section 65 of the Judicature (Northern Ireland) Act 1978, for the purpose of integrating any procedure for which provision is made by virtue of subsection (2)(e) above into the general procedure on a winding-up, bankruptcy or sequestration.
55Clients' money
(1)The Secretary of State may make regulations with respect to money (in this section referred to as " clients' money ") which authorised persons, or authorised persons of any description, hold in such circumstances as are specified in the regulations.
(2)Without prejudice to the generality of subsection (1) above, regulations under this section may—
(a)provide that clients' money held by an authorised person is held on trust;
(b)require clients' money to be paid into an account the title of which contains the word " client" and which is with an institution of a kind specified in the regulations or, in the case of a member of a recognised self-regulating organisation or a person certified by a recognised professional body, by the rules of that organisation or body;
(c)make provision with respect to the opening and keeping of clients' accounts, including provision as to the circumstances in which money other than clients' money may be paid into such accounts and the circumstances in which and the persons to whom money held in such accounts may be paid out;
(d)require the keeping of accounts and records in respect of clients' money;
(e)require any such accounts to be examined by an accountant having such qualifications as are specified in the regulations and require the accountant to report to the Secretary of State, or in the case of a member of a recognised self-regulating organisation or a person certified by a recognised professional body, to that organisation or body, whether in his opinion the provisions of the regulations have been complied with and on such other matters as may be specified in the regulations ;
(f)authorise the retention, to such extent and in such cases as may be specified in regulations, of so much of clients' money as represents interest.
(3)Where an authorised person is required to have an auditor, whether by virtue of any provision contained in or made under any enactment (including this Act) or of the rules of any such organisation or body as is mentioned in paragraph (b) of subsection (2) above, the regulations may require the examination and report referred to in paragraph (e) of that subsection to be carried out and made by that auditor.
(4)An institution with which an account is kept in pursuance of regulations made under this section does not incur any liability as constructive trustee where money is wrongfully paid from the account unless the institution permits the payment with knowledge that it is wrongful or having deliberately failed to make enquiries in circumstances in which a reasonable and honest person would have done so.
(5)In the application of this section to Scotland for the reference to money being held on trust there shall be substituted a reference to its being held as agent for the person who is entitled to call for it to be paid over to him or to be paid on his direction or to have it otherwise credited to him.
56Unsolicited calls
(1)Except so far as permitted by regulations made by the Secretary of State, no person shall in the course of or in consequence of an unsolicited call—
(a)made on a person in the United Kingdom ; or
(b)made from the United Kingdom on a person elsewhere, by way of business enter into an investment agreement with the person on whom the call is made or procure or endeavour to procure that person to enter into such an agreement.
(2)A person shall not be guilty of an offence by reason only of contravening subsection (1) above, but subject to subsection (4) below—
(a)any investment agreement which is entered into in the course of or in consequence of the unsolicited call shall not be enforceable against the person on whom the call was made: and
(b)that person shall be entitled to recover any money or other property paid or transferred by him under the agreement, together with compensation for any loss sustained by him as a result of having parted with it.
(3)The compensation recoverable under subsection (2) above shall be such as the parties may agree or as a court may, on the application of either party, determine.
(4)A court may allow an agreement to which subsection (2) above applies to be enforced or money and property paid or transferred under it to be retained if it is satisfied—
(a)that the person on whom the call was made was not influenced, or not influenced to any material extent, by anything said or done in the course of or in consequence of the call;
(b)without prejudice to paragraph (a) above, that the person on whom the call was made entered into the agreement—
(i)following discussions between the parties of such a nature and over such a period that his entering into the agreement can fairly be regarded as a consequence of those discussions rather than the call; and
(ii)was aware of the nature of the agreement and any risks involved in entering into it; or
(c)that the call was not made by—
(i)the person seeking to enforce the agreement or to retain the money or property or a person acting on his behalf or an appointed representative whose principal he was ; or
(ii)a person who has received or is to receive, or in the case of an appointed representative whose principal has received or is to receive, any commission or other inducement in respect of the agreement from a person mentioned in sub-paragraph (i) above.
(5)Where a person elects not to perform an agreement which by virtue of this section is unenforceable against him or by virtue of this section recovers money paid or other property transferred by him under an agreement he shall repay any money and return any other property received by him under the agreement.
(6)Where any property transferred under an agreement to which this section applies has passed to a third party the references to that property in this section shall be construed as references to its value at the time of its transfer under the agreement
(7)In the application of this section to anything done by a member of a recognised self-regulating organisation or a person certified by a recognised professional body in carrying on investment business in the carrying on of which he is subject to the rules of the organisation or body the reference in subsection (1) above to regulations made by the Secretary of State shall be construed as references to the rules of the organisation or body.
(8)In this section " unsolicited call" means a personal visit or oral communication made without express invitation.
57Restrictions on advertising
(1)Subject to section 58 below, no person other than an authorised person shall issue or cause to be issued an investment advertisement in the United Kingdom unless its contents have been approved by an authorised person.
(2)In this Act " an investment advertisement " means any advertisement inviting persons to enter or offer to enter into an investment agreement or to exercise any rights conferred by an investment to acquire, dispose of, underwrite or convert an investment or containing information calculated to lead directly or indirectly to persons doing so.
(3)Subject to subsection (4) below, any person who contravenes this section shall be guilty of an offence and liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both ;
(b)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
(4)A person who in the ordinary course of a business other than investment business issues an advertisement to the order of another person shall not be guilty of an offence under this section if he proves that he believed on reasonable grounds that the person to whose order the advertisement was issued was an authorised person, that the contents of the advertisement were approved by an authorised person or that the advertisement was permitted by or under section 58 below.
(5)If in contravention of this section a person issues or causes to be issued an advertisement inviting persons to enter or offer to enter into an investment agreement or containing information calculated to lead directly or indirectly to persons doing so, then, subject to subsection (8) below—
(a)he shall not be entitled to enforce any agreement to which the advertisement related and which was entered into after the issue of the advertisement; and
(b)the other party shall be entitled to recover any money or other property paid or transferred by him under the agreement, together with compensation for any loss sustained by him as a result of having parted with it
(6)If in contravention of this section a person issues or causes to be issued an advertisement inviting persons to exercise any rights conferred by an investment or containing information calculated to lead directly or indirectly to persons doing so, then, subject to subsection (8) below—
(a)he shall not be entitled to enforce any obligation to which a person is subject as a result of any exercise by him after the issue of the advertisement of any rights to which the advertisement related; and
(b)that person shall be entitled to recover any money or other property paid or transferred by him under any such obligation, together with compensation for any loss sustained by him as a result of having parted with it.
(7)The compensation recoverable under subsection (5) or (6) above shall be such as the parties may agree or as a court may, on the application of either party, determine.
(8)A court may allow any such agreement or obligation as is mentioned in subsection (5) or (6) above to be enforced or money or property paid or transferred under it to be retained if it is satisfied—
(a)that the person against whom enforcement is sought or who is seeking to recover the money or property was not influenced, or not influenced to any material extent, by the advertisement in making his decision to enter into the agreement or as to the exercise of the rights in question; or
(b)that the advertisement was not misleading as to the nature of the investment, the terms of the agreement or, as the case may be, the consequences of exercising the rights in question and fairly stated any risks involved in those matters.
(9)Where a person elects not to perform an agreement or an obligation which by virtue of subsection (5) or (6) above is unenforceable against him or by virtue of either of those subsections recovers money paid or other property transferred by him under an agreement or obligation he shall repay any money and return any other property received by him under the agreement or, as the case may be, as a result of exercising the rights in question.
(10)Where any property transferred under an agreement or obligation to which subsection (5) or (6) above applies has passed to a third party the references to that property in this section shall be construed as references to its value at the time of its transfer under the agreement or obligation.
58Exceptions from restrictions on advertising
(1)Section 57 above does not apply to—
(a)any advertisement issued or caused to be issued by, and relating only to investments issued by—
(i)the government of the United Kingdom, of Northern Ireland or of any country or territory outside the United Kingdom ;
(ii)a local authority in the United Kingdom or elsewhere;
(iii)the Bank of England or the central bank of any country or territory outside the United Kingdom ; or
(iv)any international organisation the members of which include the United Kingdom or another member State;
(b)any advertisement issued or caused to be issued by a person who is exempt under section 36, 38, 42, 43, 44 or 45 above, or by virtue of an order under section 46 above, if the advertisement relates to a matter in respect of which he is exempt.
(c)any advertisement which is issued or caused to be issued by a national of a member State other than the United Kingdom in the course of investment business lawfully carried on by him in such a State and which conforms with any rules made under section 48(2)(e) above ;
(d)any advertisement which—
(i)is subject to section 154 below; or
(ii)consists of or any part of listing particulars, supplementary listing particulars or any other document required or permitted to be published by listing rules under Part IV of this Act or by an approved exchange under Part V of this Act.
(2)Section 57 above does not apply to an advertisement inviting persons to subscribe in cash for any investments to which Part V of this Act applies if the advertisement is issued or caused to be issued by the person by whom the investments are to be issued and either the advertisement consists of a prospectus registered in accordance with that Part or the following matters (and no others that would make it an investment advertisement) are contained in the advertisement—
(a)the name of that person and his address or particulars of other means of communicating with him ;
(b)the nature of the investments, the number offered for subscription and their nominal value and price;
(c)a statement that a prospectus for the purposes of that Part of this Act is or will be available and, if it is not yet available, when it will be; and
(d)instructions for obtaining a copy of the prospectus.
(3)Section 57 above does not apply to an advertisement issued in such circumstances as may be specified in an order made by the Secretary of State for the purpose of exempting from that section—
(a)advertisements appearing to him to have a private character, whether by reason of a connection between the person issuing them and those to whom they are issued or otherwise;
(b)advertisements appearing to him to deal with investment only incidentally;
(c)advertisements issued to persons appearing to him to be sufficiently expert to understand any risks involved; or
(d)such other classes of advertisement as he thinks fit.
(4)An order under subsection (3) above may require any person who by virtue of the order is authorised to issue an advertisement to comply with such requirements as are specified in the order.
(5)An order made by virtue of paragraph (a), (b) or (c) of subsection (3) above shall be subject to annulment in pursuance of a resolution of either House of Parliament; and no order shall be made by virtue of paragraph (d) of that subsection unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
(6)Subsections (1)(c) and (2) above do not apply to any advertisement relating to an investment falling within paragraph 5 of Schedule 1 to this Act.
59Employment of prohibited persons
(1)If it appears to the Secretary of State that any individual is not a fit and proper person to be employed in connection with investment business or investment business of a particular kind he may direct that he shall not, without the written consent of the Secretary of State, be employed in connection with investment business or, as the case may be, investment business of that kind—
(a)by authorised persons or exempted persons; or
(b)by any specified person or persons, or by persons of any specified description, falling within paragraph (a) above.
(2)A direction under this section (" a disqualification direction ") shall specify the date on which it is to take effect and a copy of it shall be served on the person to whom it relates.
(3)Any consent by the Secretary of State to the employment of a person who is the subject of a disqualification direction may relate to employment generally or to employment of a particular kind, may be given subject to conditions and restrictions and may be varied by him from time to time.
(4)Where the Secretary of State proposes—
(a)to give a disqualification direction in respect of any person; or
(b)to refuse an application for his consent under this section or for the variation of such consent, he shall give that person or the applicant written notice of his intention to do so, stating the reasons for which he proposes to act and giving particulars of the right to require the case to be referred to the Tribunal under Chapter IX of this Part of this Act
(5)Any person who accepts or continues in any employment in contravention of a disqualification direction shall be guilty of an offence and liable on summary conviction to a fine not exceeding the fifth level on the standard scale.
(6)It shall be the duty of an authorised person and an appointed representative to take reasonable care not to employ or continue to employ a person in contravention of a disqualification direction.
(7)The Secretary of State may revoke a disqualification direction.
(8)In this section references to employment include references to employment otherwise than under a contract of service.
60Public statement as to person's misconduct
(1)If it appears to the Secretary of State that a person who is or was an authorised person by virtue of section 22, 24, 25 or 31 above has contravened—
(a)any provision of rules or regulations made under this Chapter or of section 56 or 59 above ; or
(b)any condition imposed under section 50 above, he may publish a statement to that effect
(2)Before publishing a statement under subsection (1) above the Secretary of State shall give the person concerned written notice of the proposed statement and of the reasons for which he proposes to act
(3)Where the reasons stated in the notice relate specifically to matters which—
(a)refer to a person identified in the notice other than the person who is or was the authorised person ; and
(b)are in the opinion of the Secretary of State prejudicial to that person in any office or employment, the Secretary of State shall, unless he considers it impracticable to do so, serve a copy of the notice on that other person.
(4)A notice under this section shall give particulars of the right to have the case referred to the Tribunal under Chapter IX of this Part of this Act.
(5)Where a case is not required to be referred to the Tribunal by a person on whom a notice is served under this section the Secretary of State shall, at the expiration of the period within which such a requirement can be made, give that person written notice that the statement is or is not to be published; and if it is to be published the Secretary of State shall after publication send a copy of it to that person and to any person on whom a copy of the notice under subsection (2) above was served.
61Injunctions and restitution orders
(1)If on the application of the Secretary of State the court is satisfied—
(a)that there is a reasonable likelihood that any person will contravene any provision of—
(i)rules or regulations made under this Chapter;
(ii)sections 47, 56, 57, or 59 above ;
(iii)any requirements imposed by an order under section 58(3) above ; or
(iv)the rules of a recognised self-regulating organisation, recognised professional body, recognised investment exchange or recognised clearing house to which that person is subject and which regulate the carrying on by him of investment business,or any condition imposed under section 50 above ;
(b)that any person has contravened any such provision or condition and that there is a reasonable likelihood that the contravention will continue or be repeated ; or
(c)that any person has contravened any such provision or condition and that there are steps that could be taken for remedying the contravention, the court may grant an injunction restraining the contravention or, in Scotland, an interdict prohibiting the contravention or, as the case may be, make an order requiring that person and any other person who appears to the court to have been knowingly concerned in the contravention to take such steps as the court may direct to remedy it.
(2)No application shall be made by the Secretary of State under subsection (1) above in respect of any such rules as are mentioned in subsection (l)(a)(iv) above unless it appears to him that the organisation, body, exchange or clearing house is unable or unwilling to take appropriate steps to restrain the contravention or to require the person concerned to take such steps as are mentioned in subsection (1) above.
(3)The court may, on the application of the Secretary of State, make an order under subsection (4) below or, in relation to Scotland, under subsection (5) below if satisfied—
(a)that profits have accrued to any person as a result of his contravention of any provision or condition mentioned in subsection (1)(a) above ; or
(b)that one or more investors have suffered loss or been otherwise adversely affected as a result of that contravention.
(4)The court may under this subsection order the person concerned to pay into court, or appoint a receiver to recover from him, such sum as appears to the court to be just having regard—
(a)in a case within paragraph (a) of subsection (3) above, to the profits appearing to the court to have accrued ;
(b)in a case within paragraph (b) of that subsection, to the extent of the loss or other adverse effect; or
(c)in a case within both paragraphs (a) and (b) of that subsection, to the profits and to the extent of the loss or other adverse effect.
(5)The court may under this subsection order the person concerned to pay to the applicant such sum as appears to the court to be just having regard to the considerations mentioned in paragraphs (a) to (c) of subsection (4) above.
(6)Any amount paid into court by or recovered from a person in pursuance of an order under subsection (4) or (5) above shall be paid out to such person or distributed among such persons as the court may direct, being a person or persons appearing to the court to have entered into transactions with that person as a result of which the profits mentioned in paragraph (a) of subsection (3) above have accrued to him or the loss or adverse effect mentioned in paragraph (b) of that subsection has been suffered.
(7)On an application under subsection (3) above the court may require the person concerned to furnish it with such accounts or other information as it may require for establishing whether any and, if so, what profits have accrued to him as mentioned in paragraph (a) of that subsection and for determining how any amounts are to be paid or distributed under subsection (6) above; and the court may require any such accounts or other information to be verified in such manner as it may direct.
(8)The jurisdiction conferred by this section shall be exercisable by die High Court and the Court of Session.
(9)Nothing in this section affects the right of any person other than the Secretary of State to bring proceedings in respect of the matters to which this section applies.
62Actions for damages
(1)Without prejudice to section 61 above, a contravention of—
(a)any rules or regulations made under this Chapter;
(b)any conditions imposed under section 50 above ;
(c)any requirements imposed by an order under section 58(3) above;
(d)the duty imposed by section 59(6) above, shall be actionable at the suit of a person who suffers loss as a result of the contravention subject to the defences and other incidents applying to actions for breach of statutory duty.
(2)Subsection (1) applies also to a contravention by a member of a recognised self-regulating organisation or a person certified by a recognised professional body of any rules of the organisation or body relating to a matter in respect of which rules or regulations have been or could be made under this Chapter in relation to an authorised person who is not such a member or so certified.
(3)Subsection (1) above does not apply—
(a)to a contravention of rules made under section 49 or conditions imposed under section 50 in connection with an alteration of the requirements of those rules; or
(b)by virtue of subsection (2) above to a contravention of rules relating to a matter in respect of which rules have been or could be made under section 49.
(4)A person shall not be guilty of an offence by reason of any contravention to which subsection (1) above applies or of a contravention of rules made under section 49 above or such conditions as are mentioned in subsection (3)(a) above and no such contravention shall invalidate any transaction.
63Gaming contracts
(1)No contract to which this section applies shall be Void or unenforceable by reason of—
(a)section 18 of the Gaming Act 1845, section 1 of the Gaming Act 1892 or any corresponding provisions in force in Northern Ireland ; or
(b)any rule of the law of Scotland whereby a contract by way of gaming or wagering is not legally enforceable.
(2)This section applies to any contract entered into by either or each party by way of business and the making or performance of which by either party constitutes an activity which falls within paragraph 12 of Schedule 1 to this Act or would do so apart from Parts III and IV of that Schedule.
Chapter VI
Powers of Intervention

64Scope of powers
(1)The powers conferred on the Secretary of State by this Chapter shall be exercisable in relation to any authorised person or, except in the case of the power conferred by section 65 below, any appointed representative of his if it appears to the Secretary of State—
(a)that the exercise of the powers is desirable for the protection of investors;
(b)that the authorised person is not fit to carry on investment business of a particular kind or to the extent to which he is carrying it on or proposing to carry it on; or
(c)that the authorised person has contravened any provision of this Act or of any rules or regulations made under it or, in purported compliance with any such provision, has furnished the Secretary of State with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under this Act.
(2)For the purposes of subsection (1)(b) above the Secretary of State may take into account any matters that could be taken into account in deciding whether to withdraw or suspend an authorisation under Chapter III of this Part of this Act.
(3)The powers conferred by this Chapter may be exercised in relation to a person whose authorisation is suspended under section 28 above or who is the subject of a direction under section 33(1)(6) above and references in this Chapter to an authorised person shall be construed accordingly.
(4)The powers conferred by this Chapter shall not be exercisable in relation to—
(a)an authorised person who is a member of a recognised self-regulating organisation or a person certified by a recognised professional body and is subject to the rules of such an organisation or body in carrying on all the investment business carried on by him ; or
(b)an appointed representative whose principal or, in the case of such a representative with more than one principal, each of whose principals is a member of such an organisation or body and is subject to the rules of such an organisation or body in carrying on the investment business in respect of which his principal or each of his principals has accepted responsibility for his activities; except that the powers conferred by virtue of section 67(l)(b) below may on any of the grounds specified in subsection (1) above be exercised in relation to such a person at the request of any such organisation of which he or, in the case of an appointed representative, any of his principals is a member of any such body by which he or, as the case may be, any of his principals is certified.
65Restriction of business
(1)The Secretary of State may prohibit an authorised person from—
(a)entering into transactions of any specified kind or entering into them except in specified circumstances or to a specified extent;
(b)soliciting business from persons of a specified kind or otherwise than from such persons or in a specified country or territory outside the United Kingdom ;
(c)carrying on business in a specified manner or otherwise than in a specified manner.
(2)A prohibition under this section may relate to transactions entered into in connection with or for the purposes of investment business or to other business which is carried on in connection with or for the purposes of investment business.
66Restriction on dealing with assets
(1)The Secretary of State may prohibit an authorised person or appointed representative from disposing of or otherwise dealing with any assets, or any specified assets, of that person or, as the case may be, representative in any specified manner or otherwise than in a specified manner.
(2)A prohibition under this section may relate to assets outside the United Kingdom.
67Vesting of assets in trustee
(1)The Secretary of State may impose a requirement that all assets, or all assets of any specified class or description, which at any time while the requirement is in force—
(a)belong to an authorised person or appointed representative ; or
(b)belong to investors and are held by or to the order of an authorised person or appointed representative, shall be transferred to and held by a trustee approved by the Secretary of State.
(2)Where a requirement is imposed under this section it shall be the duty of the authorised person or, as the case may be, appointed representative to transfer the assets to the trustee and to give him all such other assistance as may be required to enable him to discharge his functions in accordance with the requirement.
(3)Assets held by a trustee in accordance with a requirement under this section shall not be released or dealt with except in accordance with directions given by the Secretary of State or in such circumstances as may be specified by him.
(4)A requirement under this section may relate to assets outside the United Kingdom.
68Maintenance of assets in United Kingdom
(1)The Secretary of State may require an authorised person or appointed representative to maintain in the United Kingdom assets of such value as appears to the Secretary of State to be desirable with a view to ensuring that the authorised person or, as the case may be, appointed representative will be able to meet his liabilities in respect of investment business carried on by him in the United Kingdom.
(2)The Secretary of State may direct that for the purposes of any requirement under this section assets of any specified class or description shall or shall not be taken into account.
69Rescission and variation
The Secretary of State may, either of his own motion or on the application of a person on whom a prohibition or requirement has been imposed under this Chapter, rescind or vary the prohibition or requirement if it appears to the Secretary of State that it is no longer necessary for the prohibition or requirement to take effect or continue in force or, as the case may be, that it should take effect or continue in force in a different form.
70Notices
(1)The power to impose, rescind or vary a prohibition or requirement under this Chapter shall be exercisable by written notice served by the Secretary of State on the person concerned ; and any such notice shall take effect on such date as is specified in the notice.
(2)If the Secretary of State refuses to rescind or vary a prohibition or requirement on the application of the person to whom it applies he shall serve that person with a written notice of the refusal.
(3)A notice imposing a prohibition or requirement, or varying a prohibition or requirement otherwise than on the application of the person to whom it applies, and a notice under subsection (2) above shall state the reasons for which the prohibition or requirement was imposed or varied or, as the case may be, why the application was refused.
(4)Where the reasons stated in a notice to which subsection (3) above applies relate specifically to matters which—
(a)refer to a person identified in the notice other than the person to whom the prohibition or requirement applies ; and
(b)are in the opinion of the Secretary of State prejudicial to that person in any office or employment, the Secretary of State shall, unless he considers it impracticable to do so, serve a copy of the notice on that person.
(5)A notice to which subsection (3) above applies shall give particulars of the right to have the case referred to the Tribunal under Chapter IX of this Part of this Act.
(6)The Secretary of State may give public notice of any prohibition or requirement imposed by him under this Chapter and of the rescission and variation of any such prohibition or requirement; and any such notice may, if the Secretary of State thinks fit, include a statement of the reasons for which the prohibition or requirement was imposed, rescinded or varied.
71Breach of prohibition or requirement
(1)Sections 60, 61, and 62 above shall have effect in relation to a contravention of a prohibition or requirement imposed under this Chapter as they have effect in relation to any such contravention as is mentioned in those sections.
(2)In its application by virtue of this section, section 62(2) shall have effect with the substitution—
(a)for the reference to the rules of a recognised self regulating organisation of a reference to any prohibition or requirement imposed by it in the exercise of powers for purposes corresponding to those of this Chapter; and
(b)for the reference to the rules of a recognised professional body of a reference to any prohibition or requirement imposed in the exercise of powers for such purposes by that body or by any other body or person having functions in respect of the enforcement of the recognised professional body's rules relating to the carrying on of investment business.
(3)This section is without prejudice to any equitable remedy available in respect of property which by virtue of a requirement under section 67 above is subject to a trust.
Chapter VII
Winding up and Administration Orders

72Winding up orders
(1)On a petition presented by the Secretary of State by virtue of this section, the court having jurisdiction under the Insolvency Act 1986 may wind up an authorised person or appointed representative to whom this subsection applies if—
(a)the person is unable to pay his debts within the meaning of section 123 or, as the case may be, section 221 of that Act; or
(b)the court is of the opinion that it is just and equitable that the person should be wound up.
(2)Subsection (1) above applies to any authorised person, any person whose authorisation is suspended under section 28 above or who is the subject of a direction under section 33(1)(b) above or any appointed representative who is—
(a)a company within the meaning of section 735 of the Companies Act 1985 ;
(b)an unregistered company within the meaning of section 220 of the Insolvency Act 1986 ;
(c)an oversea company within the meaning of section 744 of the Companies Act 1985 ; or
(d)a partnership.
(3)For the purposes of a petition under subsection (1) above a person who defaults in an obligation to pay any sum due and payable under any investment agreement shall be deemed to be unable to pay his debts.
(4)Where a petition is presented under subsection (1) above for the winding up of a partnership on the ground mentioned in paragraph (b) of subsection (1) above or, in Scotland, on a ground mentioned in paragraph (a) or (b) of that subsection, the court shall have jurisdiction and the Insolvency Act 1986 shall have effect as if the partnership were an unregistered company within the meaning of section 220 of that Act.
(5)The Secretary of State shall not present a petition under subsection (1) above for the winding up of any person who is an authorised person by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body and is subject to the rules of the organisation or body in the carrying on of all investment business carried on by him, unless that organisation or body has consented to his doing so.
73Winding up orders: Northern Ireland
(1)On a petition presented by the Secretary of State by virtue of this section, the High Court in Northern Ireland may wind up an authorised person or appointed representative to whom this subsection applies if—
(a)the person is unable to pay his debts within the meaning of Article 480 or, as the case may be, Article 616 of the Companies (Northern Ireland) Order 1986; or
(b)the court is of the opinion that it is just and equitable that the person should be wound up.
(2)Subsection (1) above applies to any authorised person, any person whose authorisation is suspended under section 28 above or who is the subject of a direction under section 33(1X6) above or any appointed representative who is—
(a)a company within the meaning of Article 3 of the Companies (Northern Ireland) Order 1986 ;
(b)an unregistered company within the meaning of Article 615 of that Order ; or
(c)a Part XXIII company within the meaning of Article 2 of that Order ; or
(d)a partnership.
(3)For the purposes of a petition under subsection (1) above a person who defaults in an obligation to pay any sum due and payable under any investment agreement shall be deemed to be unable to pay his debts.
(4)Where a petition is presented under subsection (1) above for the winding up of a partnership on the ground mentioned in paragraph (b) of subsection (1) above, the High Court in Northern Ireland shall have jurisdiction and the Companies (Northern Ireland) Order 1986 shall have effect as if the partnership were an unregistered company within the meaning of Article 615 of that Order
(5)The Secretary of State shall not present a petition under subsection (1) above for the winding up of any person who is an authorised person by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body and is subject to the rules of the organisation or body in the carrying on of all investment business carried on by him, unless that organisation or body has consented to his doing so.
74Administration orders
A petition may be presented under section 9 of the Insolvency Act 1986 (applications for administration orders) in relation to a company to which section 8 of that Act applies which is an authorised person, a person whose authorisation is suspended under section 28 above or who is the subject of a direction under section 33(1)(b) above or an appointed representative—
(a)in the case of an authorised person who is an authorised person by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body, by that organisation or body ; and
(b)in the case of an appointed representative or an authorised person who is not authorised as mentioned in paragraph (a) above or is so authorised but is not subject to the rules of the organisation or body in question in the carrying on of all investment business carried on by him, by the Secretary of State.
Chapter VIII
Collective Investment Schemes

Preliminary

75Interpretation
(1)In this Act " a collective investment scheme " means, subject to the provisions of this section, any arrangements with respect to property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income.
(2)The arrangements must be such that the persons who are to participate as mentioned in subsection (1) above (in this Act referred to as " participants ") do not have day to day control over the management of the property in question, whether or not they have the right to be consulted or to give directions; and the arrangements must also have either or both of the characteristics mentioned in subsection (3) below.
(3)Those characteristics are—
(a)that the contributions of the participants and the profits or income out of which payments are to be made to them are pooled;
(b)that the property in question is managed as a whole by or on behalf of the operator of the scheme.
(4)Where any arrangements provide for such pooling as is mentioned in paragraph (a) of subsection (3) above in relation to separate parts of the property in question, the arrangements shall not be regarded as constituting a single collective investment scheme unless the participants are entitled to exchange rights in one part for rights in another.
(5)Arrangements are not a collective investment scheme if—
(a)the property to which the arrangements relate (other than cash awaiting investment) consists of investments falling within any of paragraphs 1 to 5, 6 (so far as relating to units in authorised unit trust schemes and recognised schemes) and 10 of Schedule 1 to this Act;
(b)each participant is the owner of a part of that property and entitled to withdraw it at any time ; and
(c)the arrangements do not have the characteristics mentioned in paragraph (a) of subsection (3) above and have those mentioned in paragraph (b) of that subsection only because the parts of the property belonging to different participants are not bought and sold separately except where a person becomes or ceases to be a participant.
(6)The following are not collective investment schemes—
(a)arrangements operated by a person otherwise than by way of business;
(b)arrangements where each of the participants carries on a business other than investment business and enters into the arrangements for commercial purposes related to that business;
(c)arrangements where each of the participants is a body corporate in the same group as the operator ;
(d)arrangements where—
(i)each of the participants is a bona fide employee or former employee (or the wife, husband, widow, widower, child or step-child under the age of eighteen of such an employee or former employee) of a body corporate in the same group as the operator; and
(ii)the property to which the arrangements relate consists of shares or debentures (as defined in paragraph 20(4) of Schedule 1 to this Act) in or of a member of that group ;
(e)arrangements where the receipt of the participants' contributions constitutes the acceptance of deposits in the course of a business which is a deposit-taking business for the purposes of the Banking Act 1979 and does not constitute a transaction prescribed for the purposes of section 2 of that Act by regulations made by the Treasury;
(f)franchise arrangements, that is to say, arrangements under which a person earns profits or income by exploiting a right conferred by the arrangements to use a trade name or design or other intellectual property or the good-will attached to it;
(g)arrangements the predominant purpose of which is to enable persons participating in them to share in the use or enjoyment of a particular property or to make its use or enjoyment available gratuitously to other persons ;
(h)arrangements under which the rights or interests of the participants are investments falling within paragraph 5 of Schedule 1 to this Act;
(i)arrangements the purpose of which is the provision of clearing services and which are operated by an authorised person, a recognised clearing house or a recognised investment exchange;
(j)contracts of insurance;
(k)occupational pension schemes.
(7)No body incorporated under the law of, or of any part of, the United Kingdom relating to building societies or industrial and provident societies or registered under any such law relating to friendly societies, and no other body corporate other than an open-ended investment company, shall be regarded as constituting a collective investment scheme.
(8)In this Act—
" a unit trust scheme " means a collective investment scheme under which the property in question is held on trust for the participants;
" an open-ended investment company " means a collective investment scheme under which—
(a)the property in question belongs beneficially to, and is managed by or on behalf of, a body corporate having as its purpose the investment of its funds with the aim of spreading investment risk and giving its members the benefit of the results of the management of those funds by or on behalf of that body; and
(b)the rights of the participants are represented by shares in or securities of that body which—
(i)the participants are entitled to have redeemed or repurchased, or which (otherwise than under Chapter VII of Part V of the Companies Act 1985 or the corresponding Northern Ireland provision) are redeemed or repurchased from them by, or out of funds provided by, that body ; or
(ii)the body ensures can be sold by the participants on an investment exchange at a price related to the value of the property to which they relate ;
" trustee ", in relation to a unit trust scheme, means the person holding the property in question on trust for the participants and, in relation to a collective investment scheme constituted under the law of a country or territory outside the United Kingdom, means any person who (whether or not under a trust) is entrusted with the custody of the property in question ;
" units " means the rights or interests (however described) of the participants in a collective investment scheme :
" the operator ", in relation to a unit trust scheme with a separate trustee, means the manager and, in relation to an open-ended investment company, means that company.
(9)If an order under section 2 above amends the references to a collective investment scheme in Schedule 1 to this Act it may also amend the provisions of this section.
Promotion of schemes

76Restrictions on promotion
(1)Subject to subsections (2), (3) and (4) below, an authorised person shall not—
(a)issue or cause to be issued in the United Kingdom any advertisement inviting persons to become or offer to become participants in a collective investment scheme or containing information calculated to lead directly or indirectly to persons becoming or offering to become participants in such a scheme ; or
(b)advise or procure any person in the United Kingdom to become or offer to become a participant in such a scheme, unless the scheme is an authorised unit trust scheme or a recognised scheme under the following provisions of this Chapter.
(2)Subsection (1) above shall not apply if the advertisement is issued to or the person mentioned in paragraph (b) of that subsection is—
(a)an authorised person ; or
(b)a person whose ordinary business involves the acquisition and disposal of property of the same kind as the property, or a substantial part of the property, to which the scheme relates.
(3)Subsection (1) above shall not apply to anything done in accordance with regulations made by the Secretary of State for the purpose of exempting from that subsection the promotion otherwise than to the general public of schemes of such descriptions as are specified in the regulations.
(4)The Secretary of State may by regulations make provision for exempting single property schemes from subsection (1) above.
(5)For the purposes of subsection (4) above a single property scheme is a scheme which has the characteristics mentioned in subsection (6) below and satisfies such other requirements as are specified in the regulations conferring the exemption.
(6)The characteristics referred to above are—
(a)that the property subject to the scheme (apart from cash or other assets held for management purposes) consists of—
(i)a single building (or a single building with ancillary buildings) managed by or on behalf of the operator of the scheme ; or
(ii)a group of adjacent or contiguous buildings managed by him or on his behalf as a single enterprise, with or without ancillary land and with or without furniture, fittings or other contents of the building or buildings in question ; and
(b)that the units of the participants in the scheme are either dealt in on a recognised investment exchange or offered on terms such that any agreement for their acquisition is conditional on their admission to dealings on such an exchange.
(7)Regulations under subsection (4) above may contain such supplementary and transitional provisions as the Secretary of State thinks necessary and may also contain provisions imposing obligations or liabilities on the operator and trustee (if any) of an exempted scheme, including, to such extent as he thinks appropriate, provisions for purposes corresponding to those for which provision can be made under section 85 below in relation to authorised unit trust schemes.
Authorised unit trust schemes

77Applications for authorisation
(1)Any application for an order declaring a unit trust scheme to be an authorised unit trust scheme shall be made by the manager and trustee, or proposed manager and trustee, of the scheme and the manager and trustee shall be different persons.
(2)Any such application—
(a)shall be made in such manner as the Secretary of State may direct; and
(b)shall contain or be accompanied by such information as he may reasonably require for the purpose of determining the application.
(3)At any time after receiving an application and before determining it the Secretary of State may require the applicant to furnish additional information.
(4)The directions and requirements given or imposed under subsections (2) and (3) above may differ as between different applications.
(5)Any information to be furnished to the Secretary of State under this section shall, if he so requires, be in such form or verified in such manner as he may specify.
78Authorisation orders
(1)The Secretary of State may, on an application duly made in accordance with section 77 above and after being furnished with all such information as he may require under that section, make an order declaring a unit trust scheme to be an authorised unit trust scheme for the purposes of this Act if—
(a)it appears to him that the scheme complies with the requirements of the regulations made under section 81 below and that the following provisions of this section are satisfied; and
(b)he has been furnished with a copy of the trust deed and a certificate signed by a solicitor to the effect that it complies with such of those requirements as relate to its contents.
(2)The manager and the trustee must be persons who are independent of each other.
(3)The manager and the trustee must each be a body corporate incorporated in the United Kingdom or another member State, the affairs of each must be administered in the country in which it is incorporated, each must have a place of business in the United Kingdom and, if the manager is incorporated in another member State, the scheme must not be one which satisfies the requirements prescribed for the purposes of section 86 below.
(4)The manager and the trustee must each be an authorised person and neither must be prohibited from acting as manager or trustee, as the case may be, by or under rules under section 48 above, by or under the rules of any recognised self-regulating organisation of which the manager or trustee is a member or by a prohibition imposed under section 65 above.
(5)The name of the scheme must not be undesirable or misleading ; and the purposes of the scheme must be reasonably capable of being successfully carried into effect.
(6)The participants must be entitled to have their units redeemed in accordance with the scheme at a price related to the net value of the property to which the units relate and determined in accordance with the scheme; but a scheme shall be treated as complying with this subsection if it requires the manager to ensure that a participant is able to sell his units on an investment exchange at a price not significantly different from that mentioned in this subsection.
(7)The Secretary of State shall inform the applicants of his decision on the application not later than six months after the date on which the application was received.
(8)On making an order under this section the Secretary of State may issue a certificate to the effect that the scheme complies with the conditions necessary for it to enjoy the rights conferred by any relevant Community instrument.
79Revocation of authorisation
(1)The Secretary of State may revoke an order declaring a unit trust scheme to be an authorised unit trust scheme if it appears to him—
(a)that any of the requirements for the making of the order are no longer satisfied ;
(b)that it is undesirable in the interests of the participants or potential participants that the scheme should continue to be authorised ; or
(c)without prejudice to paragraph (b) above, that the manager or trustee of the scheme has contravened any provision of this Act or any rules or regulations made under it or, in purported compliance with any such provision, has furnished the Secretary of State with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under this Act.
(2)For the purposes of subsection (1)(6) above the Secretary of State may take into account any matter relating to the scheme the manager or trustee, a director or controller of the manager or trustee or any person employed by or associated with the manager or trustee in connection with the scheme.
(3)In the case of a manager or trustee who is a member of a recognised self-regulating organisation the rules, prohibitions and requirements referred to in subsection (l)(c) above include the rules of that organisation and any prohibition or requirement imposed by virtue of those rules.
(4)The Secretary of State may revoke an order declaring a unit trust scheme to be an authorised unit trust scheme at the request of the manager or trustee of the scheme; but he may refuse to do so if he considers that any matter concerning the scheme should be investigated as a preliminary to a decision on the question whether the order should be revoked or that revocation would not be in the interests of the participants or would be incompatible with a Community obligation.
80Representations against refusal or revocation
(1)Where the Secretary of State proposes—
(a)to refuse an application for an order under section 78 above; or
(b)to revoke such an order otherwise than at the request of the manager or trustee of the scheme, he shall give the applicants or, as the case may be, the manager and trustee of the scheme written notice of his intention to do so, stating the reasons for which he proposes to act and giving particulars of the rights conferred by subsection (2) below.
(2)A person on whom a notice is served under subsection (1) above may, within twenty-one days of the date of service, make written representations to the Secretary of State and, if desired, oral representations to a person appointed for that purpose by the Secretary of State.
(3)The Secretary of State shall have regard to any representations made in accordance with subsection (2) above in determining whether to refuse the application or revoke the order, as the case may be.
81Constitution and management
(1)The Secretary of State may make regulations as to the constitution and management of authorised unit trust schemes, the powers and duties of the manager and trustee of any such scheme and the rights and obligations of the participants in any such scheme.
(2)Without prejudice to the generality of subsection (1) above, regulations under this section may make provision—
(a)as to the issue and redemption of the units under the scheme;
(b)as to the expenses of the scheme and the means of meeting them;
(c)for the appointment, removal, powers and duties of an auditor for the scheme ;
(d)for restricting or regulating the investment and borrowing powers exercisable in relation to the scheme ;
(e)requiring the keeping of records with respect to the transactions and financial position of the scheme and for the inspection of those records ;
(f)requiring the preparation of periodical reports with respect to the scheme and the furnishing of those reports to the participants and to the Secretary of State ; and
(g)with respect to the amendment of the scheme.
(3)Regulations under this section may make provision as to the contents of the trust deed, including provision requiring any of the matters mentioned in subsection (2) above to be dealt with in the deed; but regulations under this section shall be binding on the manager, trustee and participants independently of the contents of the deed and, in the case of the participants, shall have effect as if contained in it.
(4)Regulations under this section shall not impose limits on the remuneration payable to the manager of a scheme.
(5)Regulations under this section may contain such incidental and transitional provisions as the Secretary of State thinks necessary or expedient.
82Alteration of schemes and changes of manager or trustee
(1)The manager of an authorised unit trust scheme shall give written notice to the Secretary of State of—
(a)any proposed alteration to the scheme ; and
(b)any proposal to replace the trustee of the scheme ; and any notice given in respect of a proposed alteration involving a change in the trust deed shall be accompanied by a certificate signed by a solicitor to the effect that the change will not affect the compliance of the deed with the regulations made under section 81 above.
(2)The trustee of an authorised unit trust scheme shall give written notice to the Secretary of State of any proposal to replace the manager of the scheme.
(3)Effect shall not be given to any such proposal unless—
(a)the Secretary of State has given his approval to the proposal; or
(b)one month has elapsed since the date on which the notice was given under subsection (1) or (2) above without the Secretary of State having notified the manager or trustee that the proposal is not approved.
(4)Neither the manager nor the trustee of an authorised unit trust scheme shall be replaced except by persons who satisfy the requirements of section 78(2) to (4) above.
83Restrictions on activities of manager
(1)The manager of an authorised unit trust scheme shall not engage in any activities other than those mentioned in subsection (2) below.
(2)Those activities are—
(a)acting as manager of—
(i)a unit trust scheme;
(ii)an open-ended investment company or any other body corporate whose business consists of investing its funds with the aim of spreading investment risk and giving its members the benefit of the results of the management of its funds by or on behalf of that body ; or
(iii)any other collective investment scheme under which the contributions of the participants and the profits or income out of which payments are to be made to them are pooled ;
(b)activities for the purposes of or in connection with those mentioned in paragraph (a) above.
(3)A prohibition under section 65 above may prohibit the manager of an authorised unit trust scheme from inviting persons in any specified country or territory outside the United Kingdom to become participants in the scheme.
84Avoidance of exclusion clauses
Any provision of the trust deed of an authorised unit trust scheme shall be void in so far as it would have the effect of exempting the manager or trustee from liability for any failure to exercise due care and diligence in the discharge of his functions in respect of the scheme.
85Publication of scheme particulars
(1)The Secretary of State may make regulations requiring the manager of an authorised unit trust scheme to submit to him and publish or make available to the public on request a document (" scheme particulars ") containing information about the scheme and complying with such requirements as are specified in the regulations.
(2)Regulations under this section may require the manager of an authorised unit trust scheme to submit and publish or make available revised or further scheme particulars if—
(a)there is a significant change affecting any matter contained in such particulars previously published or made available whose inclusion was required by the regulations ; or
(b)a significant new matter arises the inclusion of information in respect of which would have been required in previous particulars if it had arisen when those particulars were prepared.
(3)Regulations under this section may provide for the payment, by the person or persons who in accordance with the regulations are treated as responsible for any scheme particulars, of compensation to any person who has become or agreed to become a participant in the scheme and suffered loss as a result of any untrue or misleading statement in the particulars or the omission from them of any matter required by the regulations to be included.
(4)Regulations under this section shall not affect any liability which any person may incur apart from the regulations.
Recognition of overseas schemes

86Schemes constituted in other member States
(1)Subject to subsection (2) below, a collective investment scheme constituted in a member State other than the United Kingdom is a recognised scheme if it satisfies such requirements as are prescribed for the purposes of this section.
(2)Not less than two months before inviting persons in the United Kingdom to become participants in the scheme the operator of the scheme shall give written notice to the Secretary of State of his intention to do so, specifying the manner in which the invitation is to be made; and the scheme shall not be a recognised scheme by virtue of this section if within two months of receiving the notice the Secretary of State notifies—
(a)the operator of the scheme; and
(b)the authorities of the State in question who are responsible for the authorisation of collective investment schemes, that the manner in which the invitation is to be made does not comply with the law in force in the United Kingdom.
(3)The notice to be given to the Secretary of State under subsection (2) above—
(a)shall be accompanied by a certificate from the authorities mentioned in subsection {2)(b) above to the effect that the scheme complies with the conditions necessary for it to enjoy the rights conferred by any relevant Community instrument;
(b)shall contain the address of a place in the United Kingdom for the service on the operator of notices or other documents required or authorised to be served on him under this Act; and
(c)shall contain or be accompanied by such other information and documents as may be prescribed.
(4)A notice given by the Secretary of State under subsection (2) above shall give the reasons for which he considers that the law in force in the United Kingdom will not be complied with and give particulars of the rights conferred by subsection (5) below.
(5)A person on whom a notice is served by the Secretary of State under subsection (2) above may, within twenty-one days of the date of service, make written representations to the Secretary of State and, if desired, oral representations to a person appointed for that purpose by the Secretary of State.
(6)The Secretary of State may in the light of any representations made in accordance with subsection (5) above withdraw his notice and in that event the scheme shall be a recognised scheme from the date on which the notice is withdrawn.
(7)Rules under section 48 above shall not apply to investment business in respect of which the operator or trustee of a scheme recognised under this section is an authorised person by virtue of section 24 above except so far as they make provision as respects—
(a)procuring persons to become participants in the scheme and advising persons on the scheme and the exercise of the rights conferred by it;
(b)matters incidental to those mentioned in paragraph (a)above.
(8)For the purposes of this section a collective investment scheme is constituted in a member State if—
(a)it is constituted under the law of that State by a contract or under a trust and is managed by a body corporate incorporated under that law ; or
(b)it takes the form of an open-ended investment company incorporated under that law.
(9)If the operator of a scheme recognised under this section gives written notice to the Secretary of State stating that he desires the scheme no longer to be recognised under this section it shall cease to be so recognised when the notice is given.
87Schemes authorised in designated countries or territories
(1)Subject to subsection (3) below, a collective investment scheme which is not a recognised scheme by virtue of section 86 above but is managed in and authorised under the law of a country or territory outside the United Kingdom is a recognised scheme if—
(a)that country or territory is designated for the purposes of this section by an order made by the Secretary of State; and
(b)the scheme is of a class specified by the order.
(2)The Secretary of State shall not make an order designating any country or territory for the purposes of this section unless he is satisfied that the law under which collective investment schemes of the class to be specified by the order are authorised and supervised in that country or territory affords to investors in the United Kingdom protection at least equivalent to that provided for them by this Chapter in the case of an authorised unit trust scheme.
(3)A scheme shall not be recognised by virtue of this section unless the operator of the scheme gives written notice to the Secretary of State that he wishes it to be recognised; and the scheme shall not be recognised if within such period from receiving the notice as may be prescribed the Secretary of State notifies the operator that the scheme is not to be recognised.
(4)The notice given by the operator under subsection (3) above—
(a)shall contain the address of a place in the United Kingdom for the service on the operator of notices or other documents required or authorised to be served on him under this Act; and
(b)shall contain or be accompanied by such information and documents as may be prescribed.
(5)Section 85 above shall have effect in relation to a scheme recognised under this section as it has effect in relation to an authorised unit trust scheme, taking references to the manager as references to the operator and, in the case of an operator who is not an authorised person, references to publishing particulars as references to causing them to be published; and regulations made by virtue of this subsection may make provision whereby compliance with any requirements imposed by or under the law of a country or territory designated under this section is treated as compliance with any requirement of the regulations.
(6)An order under subsection (1) above may contain such transitional provisions as the Secretary of State thinks necessary or expedient and shall be subject to annulment in pursuance of a resolution of either House of Parliament.
88Other overseas schemes
(1)The Secretary of State may, on the application of the operator of a scheme which—
(a)is managed in a country or territory outside the United Kingdom ; but
(b)does not satisfy the requirements mentioned in section 86(1) above and in relation to which there is no relevant order under section 87(1) above, make an order declaring the scheme to be a recognised scheme if it appears to him that it affords adequate protection to the participants, makes adequate provision for the matters dealt with by regulations under section 81 above and satisfies the following provisions of this section.
(2)The operator must be a body corporate or the scheme must take the form of an open-ended investment company.
(3)Subject to subsection (4) below, the operator and the trustee, if any, must be fit and proper persons to act as operator or, as the case may be, as trustee; and for that purpose the Secretary of State may take into account any matter relating to—
(a)any person who is or will be employed by or associated with the operator or trustee for the purposes of the scheme;
(b)any director or controller of the operator or trustee ;
(c)any other body corporate in the same group as the operator or trustee and any director or controller of any such other body.
(4)Subsection (3) above does not apply to an operator or trustee who is an authorised person and not prohibited from acting as operator or trustee, as the case may be, by or under rules under section 48 above, by or under the rules of any recognised self-regulating organisation of which he is a member or by any prohibition imposed under section 65 above.
(5)If the operator is not an authorised person he must have a representative in the United Kingdom who is an authorised person and has power to act generally for the operator and to accept service of notices and other documents on his behalf.
(6)The name of the scheme must not be undesirable or misleading ; and the purposes of the scheme must be reasonably capable of being successfully carried into effect.
(7)The participants must be entitled to have their units redeemed in accordance with the scheme at a price related to the net value of the property to which the units relate and determined in accordance with the scheme; but a scheme shall be treated as complying with this subsection if it requires the operator to ensure that a participant is able to sell his units on an investment exchange at a price not significantly different from that mentioned in this subsection.
(8)Subsections (2) to (5) of section 77 above shall apply also to an application under this section.
(9)So much of section 82 above as applies to an alteration of the scheme shall apply also to a scheme recognised under this section, taking references to the manager as references to the operator and with the omission of the requirement relating to the solicitor's certificate; and if the operator or trustee of any such scheme is to be replaced the operator or, as the case may be, the trustee, or in either case the person who is to replace him, shall give at least one month's notice to the Secretary of State.
(10)Section 85 above shall have effect in relation to a scheme recognised under this section as it has effect in relation to an authorised unit trust scheme, taking references to the manager as references to the operator and, in the case of an operator who is not an authorised person, references to publishing particulars as references to causing them to be published.
89Refusal and revocation of recognition
(1)The Secretary of State may at any time direct that a scheme shall cease to be recognised by virtue of section 87 above or revoke an order under section 88 above if it appears to him—
(a)that it is undesirable in the interests of the participants or potential participants in the United Kingdom that the scheme should continue to be recognised ;
(b)without prejudice to paragraph (a) above, that the operator or trustee of the scheme has contravened any provision of this Act or any rules or regulations made under it or, in purported compliance with any such provision, has furnished the Secretary of State with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under this Act; or
(c)in the case of an order under section 88 that any of the requirements for the making of the order are no longer satisfied.
(2)For the purposes of subsection (l)(a) above the Secretary of State may take into account any matter relating to the scheme the operator or trustee, a director or controller of the operator or trustee or any person employed by or associated with the operator or trustee in connection with the scheme.
(3)In the case of an operator or trustee who is a member of a recognised self-regulating organisation the rules, prohibitions and requirements referred to in subsection (l)(b) above include the rules of that organisation and any prohibition or requirement imposed by virtue of those rules.
(4)The Secretary of State may give such a direction or revoke such an order as is mentioned in subsection (1) above at the request of the operator or trustee of the scheme; but he may refuse to do so if he considers that any matter concerning the scheme should be investigated as a preliminary to a decision on the question whether the direction should be given or the order revoked or that the direction or revocation would not be in the interests of the participants.
(5)Where the Secretary of State proposes—
(a)to notify the operator of a scheme under section 87(3) above; or
(b)to give such a direction or to refuse to make or to revoke such an order as is mentioned in subsection (1) above, he shall give the operator written notice of his intention to do so, stating the reasons for which he proposes to act and giving particulars of the rights conferred by subsection (6) below.
(6)A person on whom a notice is served under subsection (5) above may, within twenty-one days of the date of service, make written representations to the Secretary of State and, if desired, oral representations to a person appointed for that purpose by the Secretary of State.
(7)The Secretary of State shall have regard to any representations made in accordance with subsection (6) above in determining whether to notify the operator, give the direction or refuse to make or revoke the order, as the case may be.
90Facilities and information in the United Kingdom
(1)The Secretary of State may make regulations requiring operators of recognised schemes to maintain in the United Kingdom, or in such part or parts of it as may be specified in the regulations, such facilities as he thinks desirable in the interests of participants and as are specified in the regulations.
(2)The Secretary of State may by notice in writing require the operator of any recognised scheme to include such explanatory information as is specified in the notice in any investment advertisement issued or caused to be issued by him in the United Kingdom in which the scheme is named.
Powers of intervention

91Directions
(1)If it appears to the Secretary of State—
(a)that any of the requirements for the making of an order declaring a scheme to be an authorised unit trust scheme are no longer satisfied ;
(b)that the exercise of the power conferred by this subsection is desirable in the interests of participants or potential participants in the scheme ; or
(c)without prejudice to paragraph (b) above, that the manager or trustee of such a scheme has contravened any provision of this Act or any rules or regulations made under it or, in purported compliance with any such provision, has furnished the Secretary of State with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under this Act, he may give a direction under subsection (2) below.
(2)A direction under this subsection may—
(a)require the manager of the scheme to cease the issue or redemption, or both the issue and redemption, of units under the scheme on a date specified in the direction until such further date as is specified in that or another direction;
(b)require the manager and trustee of the scheme to wind it up by such date as is specified in the direction or, if no date is specified, as soon as practicable.
(3)The revocation of the order declaring an authorised unit trust scheme to be such a scheme shall not affect the operation of any direction under subsection (2) above which is then in force; and a direction may be given under that subsection in relation to a scheme in the case of which the order declaring it to be an authorised unit trust scheme has been revoked if a direction under that subsection was already in force at the time of revocation.
(4)Sections 60, 61 and 62 above shall have effect in relation to a contravention of a direction under subsection (2) above as they have effect in relation to any such contravention as is mentioned in those sections.
(5)If it appears to the Secretary of State—
(a)that the exercise of the power conferred by this subsection is desirable in the interests of participants or potential participants in a scheme recognised under section 87 or 88 above who are in the United Kingdom ;
(b)without prejudice to paragraph (a) above, that the operator of such a scheme has contravened any provision of this Act or any rules or regulations made under it or, in purported compliance with any such provision, has furnished the Secretary of State with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under this Act; or
(c)that any of the requirements for the recognition of a scheme under section 88 above are no longer satisfied. he may direct that the scheme shall not be a recognised scheme for a specified period or until the occurrence of a specified event or until specified conditions are complied with.
(6)For the purposes of subsections (l)(b) and (5)(a) above the Secretary of State may take into account any matter relating to the scheme, the manager, operator or trustee, a director or controller of the manager, operator or trustee or any person employed by or associated with the manager, operator or trustee in connection with the scheme.
(7)In the case of a manager, operator or trustee who is a member of a recognised self-regulating organisation the rules, prohibitions and requirements referred to in subsections (l)(c) and (5)(b) above include the rules of that organisation and any prohibition or requirement imposed by virtue of those rules.
(8)The Secretary of State may, either of his own motion or on the application of the manager, trustee or operator of the scheme concerned, withdraw or vary a direction given under this section if it appears to the Secretary of State that it is no longer necessary for the direction to take effect or continue in force or, as the case may be, that it should take effect or continue in force in a different form.
92Notice of directions
(1)The power to give a direction under section 91 above in relation to a scheme shall be exercisable by written notice served by the Secretary of State on the manager and trustee or, as the case may be, on the operator of the scheme and any such notice shall take effect on such date as is specified in the notice.
(2)If the Secretary of State refuses to withdraw or vary a direction on the application of the manager, trustee or operator of the scheme concerned he shall serve that person with a written notice of refusal.
(3)A notice giving a direction, or varying it otherwise than on the application of the manager, trustee or operator concerned, or refusing to withdraw or vary a direction on the application of such a person shall state the reasons for which the direction was given or varied or, as the case may be, why the application was refused.
(4)The Secretary of State may give public notice of a direction given by him under section 91 above and of any withdrawal or variation of such a direction; and any such notice may, if the Secretary of State thinks fit, include a statement of the reasons for which the direction was given, withdrawn or varied.
93Applications to the court
(1)In any case in which the Secretary of State has power to give a direction under section 91(2) above in relation to an authorised unit trust scheme or, by virtue of subsection (3) of that section, in relation to a scheme which has been such a scheme, he may apply to the court—
(a)for an order removing the manager or trustee, or both the manager and trustee, of the scheme and replacing either or both of them with a person or persons nominated by him and appearing to him to satisfy the requirements of section 78 above ; or
(b)if it appears to the Secretary of State that no, or no suitable, person satisfying those requirements is available, for an order removing the manager or trustee, or both the manager and trustee, and appointing an authorised person to wind the scheme up.
(2)On an application under this section the court may make such order as it thinks fit; and the court may, on the application of the Secretary of State, rescind any such order as is mentioned in paragraph (b) of subsection (1) above and substitute such an order as is mentioned in paragraph (a) of that subsection.
(3)The Secretary of State shall give written notice of the making of an application under this section to the manager and trustee of the scheme concerned and take such steps as he considers appropriate for bringing the making of the application to the attention of the participants.
(4)The jurisdiction conferred by this section shall be exercisable by the High Court and the Court of Session.
(5)Section 83 above shall not apply to a manager appointed by an order made on an application under subsection (1)(b) above.
Supplemental

94Investigations
(1)The Secretary of State may appoint one or more competent inspectors to investigate and report on—
(a)the affairs of, or of the manager or trustee of, any authorised unit trust scheme ;
(b)the affairs of, or of the operator or trustee of, any recognised scheme so far as relating to activities carried on in the United Kingdom ; or
(c)the affairs of, or of the operator or trustee of, any other collective investment scheme, if it appears to the Secretary of State that it is in the interests of the participants to do so or that the matter is of public concern.
(2)An inspector appointed under subsection (1) above to investigate the affairs of, or of the manager, trustee or operator of, any scheme may also, if he thinks it necessary for the purposes of that investigation, investigate the affairs of, or of the manager, trustee or operator of, any other such scheme as is mentioned in that subsection whose manager, trustee or operator is the same person as the manager, trustee or operator of the first' mentioned scheme.
(3)Sections 434 to 436 of the Companies Act 1985 (production of documents and evidence to inspectors), except section 435(l)(o) and (b) and (2), shall apply in relation to an inspector appointed under this section as they apply to an inspector appointed under section 431 of that Act but with the modifications specified in subsection (4) below.
(4)In the provisions applied by subsection (3) above for any reference to a company or its affairs there shall be substituted a reference to the scheme under investigation by virtue of this section and the affairs mentioned in subsection (1) or (2) above and any reference to an officer or director of the company shall include a reference to any director of the manager, trustee or operator of the scheme.
(5)A person shall not under this section be required to disclose any information or produce any document which he would be entitled to refuse to disclose or produce on grounds of legal professional privilege in proceedings in the High Court or on grounds of confidentiality as between client and professional legal adviser in proceedings in the Court of Session except that a lawyer may be required to furnish the name and address of his client.
(6)Where a person claims a lien on a document its production under this section shall be without prejudice to the lien.
(7)Nothing in this section shall require a person carrying on the business of banking to disclose any information or produce any document relating to the affairs of a customer unless—
(a)the customer is a person who the inspector has reason to believe may be able to give information relevant to the investigation; and
(b)the Secretary of State is satisfied that the disclosure or production is necessary for the purposes of the investigation.
(8)An inspector appointed under this section may, and if so directed by the Secretary of State shall, make interim reports to the Secretary of State and on the conclusion of his investigation shall make a final report to him.
(9)Any such report shall be written or printed as the Secretary of State may direct and the Secretary of State may, if he thinks fit—
(a)furnish a copy, on request and on payment of the prescribed fee, to the manager, trustee or operator or any participant in a scheme under investigation or any other person whose conduct is referred to in the report; and
(b)cause the report to be published.
95Contraventions
(1)A person who contravenes any provision of this Chapter, a manager or trustee of an authorised unit trust scheme who contravenes any regulations made under section 81 above and a person who contravenes any other regulations made under this Chapter shall be treated as having contravened rules made under Chapter V of this Part of this Act or, in the case of a person who is an authorised person by virtue of his membership of a recognised self-regulating organisation or certification by a recognised professional body, the rules of that organisation or body.
(2)Subsection (1) above applies also to any contravention by the operator of a recognised scheme of a requirement imposed under section 90(2) above.
Chapter IX
The Tribunal

96The Financial Services Tribunal
(1)For the purposes of this Act there shall be a Tribunal known as the Financial Services Tribunal (in this Act referred to as " the Tribunal ").
(2)There shall be a panel of not less than ten persons to serve as members of the Tribunal when nominated to do so in accordance with subsection (3) below; and that panel shall consist of—
(a)persons with legal qualifications appointed by the Lord Chancellor after consultation with the Lord Advocate, including at least one person qualified in Scots law; and
(b)persons appointed by the Secretary of State who appear to him to be qualified by experience or otherwise to deal with the cases that may be referred to the Tribunal.
(3)Where a case is withdrawn from the Tribunal under this State shall nominate three persons from the panel to serve as members of the Tribunal in respect of that case and nominate one of them to be chairman.
(4)The person nominated to be chairman of the Tribunal in respect of any case shall be a person with legal qualifications and, so far as practicable, at least one of the other members shall be a person with recent practical experience in business relevant to the case.
(5)If while a case is being dealt with by the Tribunal one of the three persons serving as members in respect of that case becomes unable to act the case may, with the consent of the Secretary of State and of the person or persons at whose request the case was referred to the Tribunal, be dealt with by the other two members.
(6)Schedule 6 to this Act shall have effect as respects the Tribunal and its proceedings.
97References to the Tribunal
(1)Any person—
(a)on whom a notice is served under section 29, 34, 59(4), 60(2) or 70 above ; or
(b)on whom a copy of a notice under section 29, 34, 60(2) or 70 above is served or on whom the Secretary of State considers that a copy of such a notice would have been served if it had been practicable to do so, may within twenty-eight days of the date of service of the notice require the Secretary of State to refer the matter to which the notice relates to the Tribunal and, subject to the provisions of this section, the Secretary of State shall refer that matter accordingly.
(2)The Secretary of State need not refer a matter to the Tribunal at the request of the person on whom a notice was served under section 29, 34, 59(4) or 60(2) above if within the period mentioned in subsection (1) above he—
(a)decides to grant the application or, as the case may be, decides not to withdraw or suspend the authorisation, give the direction or publish the statement to which the notice relates; and
(b)gives written notice of his decision to that person.
(3)The Secretary of State need not refer a matter to the Tribunal at the request of the person on whom a notice is served under section 70 above if—
(a)that matter is the refusal of an application for the rescission or variation of a prohibition or requirement and within the period mentioned in subsection (1) above he—
(i)decides to grant the application ; and
(ii)gives written notice of his decision to that person ; or
(b)that matter is the imposition or variation of a prohibition or requirement, being a prohibition, requirement or variation which has not yet taken effect, and within the period mentioned in subsection (1) above and before the prohibition, requirement or variation takes effect he—
(i)decides to rescind the prohibition or requirement or decides not to make the variation ; and
(ii)gives written notice of his decision to that person.
(4)Where the notice served on a person under section 29 or 34 above—
(a)proposed the withdrawal of an authorisation or the giving of a direction under section 33(1)(a) above; or
(b)proposed the suspension of an authorisation or the giving of a direction under section 33(1X6) above, and at any time within the period mentioned in subsection (1) above the Secretary of State serves a new notice on that person in substitution for that previously served, then, if the substituted notice complies with subsection (5) below, subsection (1) above shall have effect in relation to the substituted notice instead of the original notice and as if the period there mentioned were twenty-eight days after the date of service of the original notice or fourteen days after the date of service of the substituted notice, whichever ends later.
(5)A notice served in substitution for a notice within subsection (4)(a) above complies with this subsection if it proposes—
(a)the suspension of an authorisation or the giving of a direction under section 33(1X6) above; or
(b)the exercise of the power conferred by section 60 above ; and a notice served in substitution for a notice within subsection (4)(b) above complies with this subsection if it proposes a less severe suspension or direction under section 33(1 MM or the exercise of the power conferred by section 60 above.
(6)The reference of the imposition or variation of a prohibition or requirement under Chapter VI of this Part of this Act to the Tribunal shall not affect the date on which it comes into effect.
98Decisions on references by applicant or authorised person etc.
(1)Where a case is referred to the Tribunal at the request of a person within section 97(l)(a) above the Tribunal shall—
(a)investigate the case ; and
(b)make a report to the Secretary of State stating what would in its opinion be the appropriate decision in the matter and the reasons for that opinion ; and it shall be the duty of the Secretary of State to decide the matter forthwith in accordance with the Tribunal's report.
(2)Where the matter referred to the Tribunal is the refusal of an application the Tribunal may under this section report that the appropriate decision would be to grant or refuse the application or—
(a)in the case of an application for the variation of a suspension, direction, consent, prohibition or requirement, to vary it in a specified manner;
(b)in the case of an application for the rescission of a prohibition or requirement, to vary the prohibition or requirement in a specified manner.
(3)Where the matter referred to the Tribunal is any action of the Secretary of State other than the refusal of an application the Tribunal may report that the appropriate decision would be—
(a)to take or not to take the action taken or proposed to be taken by the Secretary of State or to take any other action that he could take under the provision in question ; or
(b)to take instead or in addition any action that he could take in the case of the person concerned under any one or more of the provisions mentioned in subsection (4) below other than that under which he was acting or proposing to act.
(4)Those provisions are sections 28, 33 and 60 above and Chapter VI of this Part of this Act; and sections 29, 34, 60(2) and (3) and 70(2) and (4) above shall not apply to any action taken by the Secretary of State in accordance with the Tribunal's report.
(5)The Tribunal shall send a copy of its report under this section to the person at whose request the case was referred to it; and the Secretary of State shall serve him with a written notice of the decision made by him in accordance with the report.
99Decisions on references by third parties
Where a case is referred to the Tribunal at the request of a person within section 97(1)(6) above the Tribunal shall report to the Secretary of State whether the reasons stated in the notice in question which relate to that person are substantiated ; and the Tribunal shall send a copy of the report to that person and to the person on whom the notice was served.
100Withdrawal of references
(1)A person who has required a case to be referred to the Tribunal may at any time before the conclusion of the proceedings before the Tribunal withdraw the reference.
(2)The Secretary of State may at any such time withdraw any reference made at the request of a person on whom a notice was served under any of the provisions mentioned in subsection (l)(a) of section 97 above if he—
(a)decides as mentioned in subsection (2)(a) or (3)(a)(i) or (b)(i) of that section ; and
(b)gives such a notice as is mentioned in subsection (2)(b) or (3)(a)(ii) or (b)(i\) of that section ; but a reference shall not be withdrawn by virtue of such a decision and notice as are mentioned in paragraph (b) of subsection (3) unless the decision is made and the notice is given before the prohibition, requirement or variation has taken effect.
(3)Where a case is referred to the Tribunal the Secretary of section the Tribunal shall not further investigate the case or make a report under section 98 or 99 above; but where the reference is withdrawn otherwise than by the Secretary of State he may require the Tribunal to make a report to him on the results of its investigation up to the time when the reference was withdrawn.
(4)Where two or more persons have required a case to be referred to the Tribunal the withdrawal of the reference by one or more of them shall not affect the functions of the Tribunal as respects the case so far as relating to a person who has not withdrawn the reference.
(5)Where a person on whom a notice was served under section 29, 34 or 60 above withdraws a case from the Tribunal subsection (5) of each of those sections shall apply to him as if he had not required the case to be referred.
101Reports
(1)In preparing its report on any case the Tribunal shall have regard to the need to exclude, so far as practicable, any matter which relates to the affairs of a particular person (not being a person who required or could have required the case to be referred to the Tribunal) where the publication of that matter would or might, in the opinion of the Tribunal, seriously and prejudicially affect the interests of that person.
(2)The Secretary of State may, in such cases as he thinks fit, publish the report of the Tribunal and offer copies of any such report for sale.
(3)The Secretary of State may, on request and on payment of the prescribed fee, supply a copy of a report of the Tribunal to any person whose conduct is referred to in the report or whose interests as a client or creditor are affected by the conduct of a person to whom the proceedings before the Tribunal related.
(4)If the Secretary of State is of opinion that there is good reason for not disclossing any part of a report he may cause that part to be omitted from the report as published under subsection (2) or from the copy of it supplied under subsection (3) above.
(5)A copy of a report of the Tribunal endorsed with a certificate signed by or on behalf of the Secretary of State stating that it is a true copy shall be admissible as evidence of the opinion of the Tribunal as to any matter referred to in the report; and a certificate purporting to be signed as aforesaid shall be deemed to have been duly signed unless the contrary is shown.
Chapter X
Information

102Register of authorised persons and recognised organisations etc.
(1)The Secretary of State shall keep a register containing an entry in respect of—
(a)each person who is an authorised person by virtue of an authorisation granted by the Secretary of State;
(b)each other person who appears to him to be an authorised person by virtue of any provision of this Part of this Act;
(c)each recognised self-regulating organisation, recognised professional body, recognised investment exchange and recognised clearing house;
(d)each authorised unit trust scheme and recognised scheme;
(e)each person in respect of whom a direction under section 59 above is in force.
(2)The entry in respect of each authorised person shall consist of—
(a)a statement of the provision by virtue of which he is an authorised person ;
(b)in the case of a person who is an authorised person by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body, the name and address of the organisation or body;
(c)in the case of a person who is an authorised person by virtue of section 25 or 31 above, information as to the services which that person holds himself out as able to provide;
(d)in the case of a person who is an authorised person by virtue of section 31 above, the address notified to the Secretary of State under section 32 above ;
(e)in the case of a person who is an authorised person by virtue of any provision other than section 31 above, the date on which he became an authorised person by virtue of that provision ; and (f) such other information as the Secretary of State may determine.
(3)The entry in respect of each such organisation, body, exchange or clearing house as is mentioned in subsection (1)(c) above shall consist of its name and address and such other information as the Secretary of State may determine.
(4)The entry in respect of each such scheme as is mentioned in subsection (1)(d) above shall consist of its name and, in the case of an authorised unit trust scheme, the name and address of the manager and trustee and, in the case of a recognised scheme, the name and address of the operator and of any representative of the operator in the United Kingdom and, in either case, such other information as the Secretary of State may determine.
(5)The entry in respect of each such person as is mentioned in subsection (l)(e) above shall include particulars of any consent for that person's employment given by the Secretary of State.
(6)Where it appears to the Secretary of State that any person in respect of whom there is an entry in the register by virtue of subsection (1) (a) or (b) above has ceased to be an authorised person (whether by death, by withdrawal or other cessation of his authorisation, as a result of his ceasing to be a member of a recognised self-regulating organisation or otherwise) the Secretary of State shall make a note to that effect in the entry together with the reason why the person in question is no longer an authorised person.
(7)Where
(a)an organisation, body, exchange or clearing house in respect of which there is an entry in the register by virtue of paragraph (c) of subsection (1) above has ceased to be recognised or ceased to exist;
(b)an authorised unit trust scheme or recognised scheme in respect of which there is an entry in the register by virtue of paragraph (d) of that subsection has ceased to be authorised or recognised ; or
(c)the direction applying to a person in respect of whom there is an entry in the register by virtue of paragraph (e) of that subsection has ceased to have effect, the Secretary of State shall make a note to that effect in the entry.
(8)An entry in respect of which a note is made under subsection (6) or (7) above may be removed from the register at the end of such period as the Secretary of State thinks appropriate.
103Inspection of register
(1)The information contained in the entries included in the register otherwise than by virtue of section 102(l)(e) above shall be open to inspection; and the Secretary of State may publish the information contained in those entries in any form he thinks appropriate and may offer copies of any such information for sale.
(2)A person shall be entitled to ascertain whether there is an entry in the register by virtue of subsection (l)(e) of section 102 above (not being an entry in respect of which there is a note under subsection (7) of that section) in respect of a particular person specified by him and, if there is such an entry, to inspect it.
(3)Except as provided by subsection (2) above the information contained in the register by virtue of section 102(l)(e) above shall not be open to inspection by any person unless he satisfies the Secretary of State that he has a good reason for seeking the information.
(4)A person to whom information is made available by the Secretary of State under subsection (3) above shall not, without the consent of the Secretary of State or of the person to whom the information relates, make use of it except for the purpose for which it was made available.
(5)Information which by virtue of this section is open to inspection shall be open to inspection free of charge but only at such times and places as the Secretary of State may appoint; and a person entitled to inspect any information may obtain a certified copy of it from the Secretary of State on payment of the prescribed fee.
(6)The register may be kept by the Secretary of State in such form as he thinks appropriate with a view to facilitating inspection of the information which it contains.
104Power to call for information
(1)The Secretary of State may by notice in writing require a person who is authorised to carry on investment business by virtue of section 22, 24, 25 or 31 above to furnish him with such information as he may reasonably require for the exercise of his functions Under this Act.
(2)The Secretary of State may by notice in writing require a recognised self-regulating organisation, recognised professional body, recognised investment exchange or recognised clearing house to furnish him with such information as he may reasonably require for the exercise of his functions under this Act.
(3)The Secretary of State may require any information which he requires under this section to be furnished within such reasonable time and verified in such manner as he may specify.
(4)Sections 60, 61 and 62 above shall have effect in relation to a contravention of a requirement imposed under subsection (1) above as they have effect in relation to a contravention of the provisions to which those sections apply.
105Investigation powers
(1)The powers of the Secretary of State under this section shall be exercisable in any case in which it appears to him that there is good reason to do so for the purpose of investigating the affairs, or any aspect of the affairs, of any person so far as relevant to any investment business which he is or was carrying on or appears to the Secretary of State to be or to have been carrying on.
(2)Those powers shall not be exercisable for the purpose of investigating the affairs of any exempted person unless he is an appointed representative or the investigation is in respect of investment business in respect of which he is not an exempted person and shall not be exercisable for the purpose of investigating the affairs of a member of a recognised self-regulating organisation or a person certified by a recognised professional body in respect of investment business in the carrying on of which he is subject to its rules unless—
(a)that organisation or body has requested the Secretary of State to investigate those affairs; or
(b)it appears to him that the organisation or body is unable or unwilling to investigate them in a satisfactory manner.
(3)The Secretary of State may require the person whose affairs are to be investigated (" the person under investigation ") or any connected person to attend before the Secretary of State at a specified time and place and answer questions or otherwise furnish information with respect to any matter relevant to the investigation.
(4)The Secretary of State may require the person under investigation or any other person to produce at a specified time and place any specified documents which appear to the Secretary of State to relate to any matter relevant to the investigation ; and—
(a)if any such documents are produced, the Secretary of State may take copies or extracts from them or require the person producing them or any connected person to provide an explanation of any of them ;
(b)if any such documents are not produced, the Secretary of State may require the person who was required to produce them to state, to the best of his knowledge and belief, where they are.
(5)A statement by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.
(6)A person shall not under this section be required to disclose any information or produce any document which he would be entitled to refuse to disclose or produce on grounds of legal professional privilege in proceedings in the High Court or on grounds of confidentiality as between client and professional legal adviser in proceedings in the Court of Session except that a lawyer may be required to furnish the name and address of his client.
(7)The Secretary of State shall not require a recognised bank or licensed institution within the meaning of the Banking Act 1979 to disclose any information or produce any document relating to the affairs of a customer unless the Secretary of State considers it necessary to do so for the purpose of investigating any investment business carried on, or appearing to the Secretary of State to be carried on or to have been carried on, by the bank, institution or customer or, if the customer is a related company of the person under investigation, by that person.
(8)Where a person claims a lien on a document its production under this section shall be without prejudice to the lien.
(9)In this section—
" connected person", in relation to any other person means—
(a)any person who is or was that other person's partner, employee, agent, appointed representative, banker, auditor or solicitor; and
(b)where the other person is a body corporate, any person who is or was a director, secretary or controller of that body corporate or of another body corporate of which it is or was a subsidiary ; and
(c)where the other person is an unincorporated association, any person who is or was a member of the governing body or an officer or controller of the association; and
(d)where the other person is an appointed representative, any person who is or was his principal; and
(e)where the other person is the person under investigation (being a body corporate), any related company of that body corporate and any person who is a connected person in relation to that company ;
" documents " includes information recorded in any form and, in relation to information recorded otherwise man in legible form, references to its production include references to producing a copy of the information in legible form;
" related company ", in relation to a person under investigation (being a body corporate), means any other body corporate which is or at any material time was—
(a)a holding company or subsidiary of the person under investigation;
(b)a subsidiary of a holding company of that person; or
(c)a holding company of a subsidiary of that person, and whose affairs it is in the Secretary of State's opinion necessary to investigate for the purpose of investigating the affairs of that person.
(10)Any person who without reasonable excuse fails to comply with a requirement imposed on him under this section shall be guilty of an offence and liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding the fifth level on the standard scale or to both.
106Exercise of investigation powers by officer etc.
(1)The Secretary of State may authorise any officer of his or any other competent person to exercise on his behalf all or any of the powers conferred by section 105 above but no such authority shall be granted except for the purpose of investigating the affairs, or any aspects of the affairs, of a person specified in the authority.
(2)No person shall be bound to comply with any requirement imposed by a person exercising powers by virtue of an authority granted under this section unless he has, if required to do so, produced evidence of his authority.
(3)Where the Secretary of State authorises a person other than one of his officers to exercise any powers by virtue of this section that person shall make a report to the Secretary of State in such manner as he may require on the exercise of those powers and the results of exercising them.
Chapter XI
Auditors

107Appointment of auditors
(1)The Secretary of State may make rules requiring a a person who is authorised to carry on investment business by virtue of section 25 or 31 above and who, apart from the rules, is not required by or under any enactment to appoint an auditor to appoint as an auditor a person satisfying such conditions as to qualifications and otherwise as may be specified in or imposed under the rules.
(2)Rules under this section may make provision—
(a)specifying the manner in which and the time within which an auditor is to be appointed ;
(b)requiring the Secretary of State to be notified of any such appointment and enabling the Secretary of State to make an appointment if no appointment is made or notified as required by the rules ;
(c)with respect to the remuneration of an auditor appointed under the rules;
(d)with respect to the term of office, removal and resignation of any such auditor ;
(e)requiring any such auditor who is removed, resigns or is not reappointed to notify the Secretary of State whether there are any circumstances connected with his ceasing to hold office which he considers should be brought to the Secretary of State's attention.
(3)An auditor appointed under the rules shall in accordance with the rules examine and report on the accounts of the authorised person in question and shall for that purpose have such duties and powers as are specified in the rules.
108Power to require second audit
(1)If in any case it appears to the Secretary of State that there is good reason to do so he may direct any person who is authorised to carry on investment business by virtue of section 25 or 31 above to submit for further examination by a person approved by the Secretary of State—
(a)any accounts on which that person's auditor has reported or any information given under section 52 or 104 above which has been verified by that auditor; or
(b)such matters contained in any such accounts or information as are specified in the direction; and the person making the further examination shall report his conclusions to the Secretary of State.
(2)Any further examination and report required by a direction under this section shall be at the expense of the authorised person concerned and shall be carried out and made within such time as is specified in the direction or within such further time as the Secretary of State may allow.
(3)The person carrying out an examination under this section shall have all the powers that were available to the auditor; and it shall be the duty of the auditor to afford him all such assistance as he may require.
(4)Where a report made under this section relates to accounts which under any enactment are required to be sent to or made available for inspection by any person or to be delivered for registration, the report, or any part of it (or a note that such a report has been made) may be similarly sent, made available or delivered by the Secretary of State.
109Communication by auditor with supervisory authorities
(1)No duty to which an auditor of an authorised person may be subject shall be regarded as contravened by reason of his communicating in good faith to the Secretary of State, whether or not in response to a request from him, any information or opinion on a matter of which the auditor has become aware in his capacity as auditor of that person and which is relevant to any functions of the Secretary of State under this Act.
(2)If it appears to the Secretary of State that any auditor or class of auditor to whom subsection (1) above applies is not subject to satisfactory rules made or guidance issued by a professional body specifying circumstances in which matters are to be communicated to the Secretary of State as mentioned in that subsection the Secretary of State may himself make rules applying to that auditor or that class of auditor and specifying such circumstances; and it shall be the duty of an auditor to whom the rules made by the Secretary of State apply to communicate a matter to the Secretary of State in the circumstances specified by the rules.
(3)The matters to be communicated to the Secretary of State in accordance with any such rules or guidance may include matters relating to persons other than the authorised person.
(4)No such rules as are mentioned in subsection (2) above shall be made by the Secretary of State unless a draft of them has been laid before and approved by a resolution of each House of Parliament.
(5)This section applies to—
(a)the communication by an auditor to a recognised self-regulating organisation or recognised professional body of matters relevant to its function of determining whether a person is a fit and proper person to carry on investment business; and
(b)the communication to such an organisation or body or any other authority or person of matters relevant to its or his function of determining whether a person is complying with the rules applicable to his conduct of investment business, as it applies to the communication to the Secretary of State of matters relevant to his functions under this Act.
110Overseas business
(1)A person incorporated or having his head office outside the United Kingdom who is authorised as mentioned in subsection (1) of section 107 above may, whether or not he is required to appoint an auditor apart from the rules made under that subsection, appoint an auditor in accordance with those rules in respect of the investment business carried on by him in the United Kingdom and in that event that person shall be treated for the purposes of this Chapter as the auditor of that person.
(2)In the case of a person to be appointed as auditor of a person incorporated or having his head office outside the United Kingdom the conditions as to qualifications imposed by or under the rules made under that section may be regarded as satisfied by qualifications obtained outside the United Kingdom which appear to the Secretary of State to be equivalent.
(3)A person incorporated or having his head office outside the United Kingdom shall not be regarded for the purposes of section 25 above as a fit and proper person to carry on investment business unless—
(a)he has appointed an auditor in accordance with rules made under section 107 above in respect of the investment business carried on by him in the United Kingdom ; or
(b)he has an auditor having qualifications, powers and duties appearing to the Secretary of State to be equivalent to those applying to an auditor appointed in accordance with those rules, and, in either case, the auditor is able and willing to communicate with the Secretary of State and other bodies and persons as mentioned in section 109 above.
111Offences and enforcement
(1)Any authorised person and any officer, controller or manager of an authorised person, who knowingly or recklessly furnishes an auditor appointed under the rules made under section 107 or a person carrying out an examination under section 108 above with information which the auditor or that person requires or is entitled to require and which is false or misleading in a material particular shall be guilty of an offence and liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;
(b)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
(2)The duty of an auditor under section 108(3) above shall be enforceable by mandamus or, in Scotland, by an order for specific performance under section 91 of the Court of Session Act 1868.
(3)If it appears to the Secretary of State that an auditor has failed to comply with the duty mentioned in section 109(2) above, the Secretary of State may disqualify him from being the auditor of an authorised person or any class of authorised person ; but the Secretary of State may remove any disqualification imposed under this subsection if satisfied that the person in question will in future comply with that duty.
(4)An authorised person shall not appoint as auditor a person disqualified under subsection (3) above; and a person who is an authorised person by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body who contravenes this subsection shall be treated as having contravened the rules of the organisation or body.
Chapter XII
Fees

112Application fees
(1)An applicant for a recognition order under Chapter III or IV of this Part of this Act shall pay such fees in respect of his application as may be required by a scheme made and published by the Secretary of State; and no application for such an order shall be regarded as duly made unless this subsection is complied with.
(2)A scheme made for the purposes of subsection (1) above shall specify the time when the fees are to be paid and may—
(a)provide for the determination of the fees in accordance with a specified scale or other specified factors;
(b)provide for the return or abatement of any fees where an application is refused or withdrawn ; and
(c)make different provision for different cases.
(3)Any scheme made for the purposes of subsection (1) above shall come into operation on such date as is specified in the scheme (not being earlier than the day on which it is first published) and shall apply to applications made on or after the date on which it comes into operation.
(4)The power to make a scheme for the purposes of subsection (1) above includes power to vary or revoke a previous scheme made under those provisions.
(5)Every application under section 26, 77 or 88 above shall be accompanied by the prescribed fee and every notice given to the Secretary of State under section 32, 86(2) or 87(3) above shall be accompanied by such fee as may be prescribed ; and no such application or notice shall be regarded as duly made or given unless this subsection is complied with.
113Periodical fees
(1)Every recognised self-regulating organisation, recognised professional body, recognised investment exchange and recognised clearing house shall pay such periodical fees to the Secretary of State as may be prescribed.
(2)So long as a body is authorised under section 22 above to carry on insurance business which is investment business it shall pay to the Secretary of State such periodical fees as may be prescribed.
(3)So long as a society is authorised under section 23 above to carry on investment business it shall—
(a)if it is authorised by virtue of subsection (1) of that section, pay to the Chief Registrar of friendly societies such periodical fees as he may by regulations specify; and
(b)if it is authorised by virtue of subsection (2) of that section, pay to the Registrar of Friendly Societies for Northern Ireland such periodical fees as he may by regulations specify.
(4)A person who is an authorised person by virtue of section 25 or 31 above shall pay such periodical fees to the Secretary of State as may be prescribed.
(5)If a person fails to pay any fee which is payable by him under subsection (4) above the Secretary of State may serve on him a written notice requiring him to pay the fee within twenty-eight days of service of the notice; and if the fee is not paid within that period that person's authorisation shall cease to have effect unless the Secretary of State otherwise directs.
(6)A direction under subsection (5) above may be given so as to have retrospective effect; and the Secretary of State may under that subsection direct that the person in question shall continue to be an authorised person only for such period as is specified in the direction.
(7)Subsection (5) above is without prejudice to the recovery of any fee as a debt due to the Crown.
(8)The manager of each authorised unit trust scheme and the operator of each recognised scheme shall pay such periodical fees to the Secretary of State as may be prescribed.
Chapter XIII
Transfer of Functions to Designated Agency

114Power to transfer functions to designated agency
(1)If it appears to the Secretary of State—
(a)that a body corporate has been established which is able and willing to discharge all or any of the functions to which this section applies ; and
(b)that the requirements of Schedule 7 to this Act are satisfied in the case of that body, he may, subject to the provisions of this section and Chapter XIV of this Part of this Act, make an order transferring all or any of those functions to that body.
(2)The body to which functions are transferred by the first order made under subsection (1) above shall be the body known as The Securities and Investments Board Limited if it appears to the Secretary of State that it is able and willing to discharge them, that the requirements mentioned in paragraph (b) of that subsection are satisfied in the case of that body and that he is not precluded from making the order by the subsequent provisions of this section or Chapter XIV of this Part of this Act.
(3)An order under subsection (1) above is in this Act referred to as " a delegation order " and a body to which functions are transferred by a delegation order is in this Act referred to as " a designated agency ".
(4)Subject to subsections (5) and (6) below, this section applies to any functions of the Secretary of State under Chapters II to XII of this Part of this Act and to his functions under paragraphs 23 and 25(2) of Schedule 1 and paragraphs 4, 5 and 15 of Schedule 15 to this Act.
(5)This section does not apply to any functions under—
(a)section 31(4);
(b)section 46;
(c)section 48(8);
(d)section 58(3);
(e)section 86(1) or 87(1);
(f)section 96;
(g)section 109(2) above.
(6)This section does not apply to the making or revocation of a recognition order in respect of an overseas investment exchange or overseas clearing house or the making of an application to the court under section 12 above in respect of any such exchange or clearing house.
(7)Any function may be transferred by a delegation order either wholly or in part.
(8)In the case of a function under section 6 or 72 or a function under section 61 which is exercisable by virtue of subsection (l)(fl)(ii) or (iii) of that section, the transfer may be subject to a reservation that it is to be exercisable by the Secretary of State concurrently with the designated agency and any transfer of a function under section 94, 105 or 106 shall be subject to such a reservation.
(9)The Secretary of State shall not make a delegation order transferring any function of making rules or regulations to a designated agency unless—
(a)the agency has furnished him with a copy of the rules and regulations which it proposes to make in the exercise of those functions; and
(b)he is satisfied that those rules and regulations will afford investors an adequate level of protection and in the case of such rules and regulations as are mentioned in Schedule 8 to this Act, comply with the principles set out in that Schedule.
(10)The Secretary of State shall also before making a delegation order transferring any functions to a designated agency require it to furnish him with a copy of any guidance intended to have continuing effect which it proposes to issue in writing or other legible form and the Secretary of State may take any such guidance into account in determining whether he is satisfied as mentioned in subsection (9)(b) above.
(11)No delegation order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
(12)In this Act references to guidance issued by a designated agency are references to guidance issued or any recommendation made by it which is issued or made to persons generally or to any class of persons, being, in either case, persons who are or may be subject to rules or regulations made by it, or who are or may be recognised or authorised by it, in the exercise of its functions under a delegation order.
115Resumption of transferred functions
(1)The Secretary of State may at the request or with the consent of a designated agency make an order resuming all or any of the functions transferred to the agency by a delegation order.
(2)The Secretary of State may, in the circumstances mentioned in subsection (3), (4) or (5) below, make an order resuming—
(a)all the functions transferred to a designated agency by a delegation order; or
(b)all, all legislative or all administrative functions transferred to a designated agency by a delegation order so far as relating to investments or investment business of any class.
(3)An order may be made under subsection (2) above if at any time it appears to the Secretary of State that any of the requirements of Schedule 7 to this Act are not satisfied in the case of the agency.
(4)An order may be made under subsection (2) above as respects functions relating to any class of investment or investment business if at any time it appears to the Secretary of State that the agency is unable or unwilling to discharge all or any of the transferred functions in respect of all or any investments or investment business falling within that class.
(5)Where the transferred functions consist of or include any functions of making rules or regulations an order may be made under subsection (2) above if at any time it appears to the Secretary of State that the rules or regulations made by the agency do not satisfy the requirements of section 114(9)(2>) above.
(6)An order under subsection (1) above shall be subject to annulment in pursuance of a resolution of either House of Parliament; and no other order shall be made under this section unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
(7)In subsection (2)(b) above—
(a)" legislative functions" means functions of making rules or regulations;
(b)" administrative functions " means functions other than legislative functions; but the resumption of legislative functions shall not deprive a designated agency of any function of prescribing fees to be paid or information to be furnished in connection with administrative functions retained by the agency; and the resumption of administrative functions shall extend to the function of prescribing fees to be paid and information to be furnished in connection with those administrative functions.
116Status and exercise of transferred functions
Schedule 9 to this Act shall have effect as respects the status of a designated agency and the exercise of the functions transferred to it by a delegation order.
117Reports and accounts
(1)A designated agency shall at least once in each year for which the delegation order is in force make a report to the Secretary of State on the discharge of the functions transferred to it by the order and on such other matters as the order may require.
(2)The Secretary of State shall lay before Parliament copies of each report received by him under this section.
(3)The Secretary of State may give directions to a designated agency with respect to its accounts and the audit of its accounts; and it shall be the duty of the agency to comply with the directions.
(4)Subsection (3) above shall not apply to a designated agency which is a company to which section 227 of the Companies Act 1985 applies; but the Secretary of State may require any designated agency (whether or not such a company) to comply with any provisions of that Act which would not otherwise apply to it or direct that any provision of that Act shall apply to the agency with such modifications as are specified in the direction; and it shall be the duty of the agency to comply with any such requirement or direction.
(5)In subsection (4) above the references to the Companies Act 1985 and section 227 of that Act include references to the corresponding Northern Ireland provisions.
118Transitional and supplementary provisions
(1)A delegation order shall not affect anything previously done in the exercise of a function which is transferred by the order; and any order resuming a function shall not affect anything previously done by the designated agency in the exercise of a function which is resumed.
(2)A delegation order and an order resuming any functions transferred by a delegation order may contain, or the Secretary of State may by a separate order under this section make, such transitional and other supplementary provisions as he thinks necessary or expedient in connection with the delegation order or the order resuming the functions in question.
(3)The provisions that may be made under subsection (2) above in connection with a delegation order include, in particular, provisions—
(a)for modifying or excluding any provision of this Act in its application to any function transferred by the order;
(b)for applying to a designated agency, in connection with any such function, any provision applying to the Secretary of State which is contained in or made under any other enactment;
(c)for the transfer of any property, rights or liabilities from the Secretary of State to a designated agency;
(d)for the carrying on and completion by a designated agency of anything in process of being done by the Secretary of State when the order takes effect; and
(e)for the substitution of a designated agency for the Secretary of State in any instrument, contract or legal proceedings.
(4)The provisions that may be made under subsection (2) above in connection with an order resuming any functions include, in particular, provisions—
(a)for the transfer of any property, rights or liabilities from the agency to the Secretary of State;
(b)for the carrying on and completion by the Secretary of State of anything in process of being done by the agency when the order takes effect;
(c)for the substitution of the Secretary of State for the agency in any instrument, contract or legal proceedings; and
(d)in a case where some functions remain with the agency, for modifying or excluding any provision of this Act in its application to any such functions.
(5)In a case where any function of a designated agency is resumed and is to be immediately transferred by a delegation order to another designated agency, the provisions that may be made under subsection (2) above may include provisions for any of the matters mentioned in paragraphs (a) to (c) of subsection (4) above, taking references to the Secretary of State as references to that other agency.
(6)Any order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.
Chapter XIV
Prevention of Restrictive Practices

Examination of rules and practices

119Recognised self-regulating organisations, investment exchanges and clearing houses
(1)The Secretary of State shall not make a recognition order in respect of a self-regulating organisation, investment exchange or clearing house unless he is satisfied that—
(a)the rules and any guidance of which copies are furnished with the application for the order; and
(b)in the case of an investment exchange, any arrangements of which particulars are furnished with the application, do not have, and are not intended or likely to have, to any significant extent the effect of restricting, distorting or preventing competition or, if they have or are intended or likely to have that effect to any significant extent, that the effect is not greater than is necessary for the protection of investors.
(2)The powers conferred by subsection (3) below shall be exercisable by the Secretary of State if at any time it appears to him that—
(a)any rules made or guidance issued by a recognised self regulating organisation, investment exchange or clearing house or any clearing arrangements made by a recognised clearing house;
(b)any practices of any such organisation, exchange or clearing house; or
(c)any practices of persons who are members of, or otherwise subject to the rules made by, any such organisation, exchange or clearing house, have, or are intended or likely to have, to a significant extent the effect of restricting, distorting or preventing competition and that that effect is greater than is necessary for the protection of investors.
(3)The powers exercisable under this subsection are—
(a)to revoke the recognition order of the organisation, exchange or clearing house;
(b)to direct it to take specified steps for the purpose of securing that the rules, guidance, arrangements or practices in question do not have the effect mentioned in subsection (2) above;
(c)to make alterations in the rules for that purpose ; and subsections (2) to (5), (7) and (9) of section 11 above shall have effect in relation to the revocation of a recognition order under this subsection as they have effect in relation to the revocation of such an order under subsection (1) of that section.
(4)Subsection (3)(c) above does not apply to an overseas investment exchange or overseas clearing house.
(5)The practices referred to in paragraph (b) of subsection (2) above are practices of the organisation, exchange or clearing house in its capacity as such, being, in the case of a clearing house, practices in respect of its clearing arrangements; and the practices referred to in paragraph (c) of that subsection are practices in relation to business in respect of which the persons in question are subject to the rules of the organisation, exchange or clearing house and which are required or contemplated by its rules or guidance or otherwise attributable to its conduct in its capacity as such.
120Modification of s. 119 where recognition function is transferred
(1)This section applies instead of section 119 above where the function of making or revoking a recognition order in respect of a self-regulating organisation, investment exchange or clearing house is exercisable by a designated agency.
(2)The designated agency—
(a)shall send to the Secretary of State a copy of the rules and of any guidance or arrangements of which copies or particulars are furnished with any application made to the agency for a recognition order together with any other information supplied with or in connection with the application; and
(b)shall not make the recognition order without the leave of the Secretary of State ; and he shall not give leave in any case in which he would (apart from the delegation order) have been precluded by section 119(1) above from making the recognition order.
(3)A designated agency shall send the Secretary of State a copy of any notice received by it under section 14(6) or 41(5) or (6) above.
(4)If at any time it appears to the Secretary of State in the case of a recognised self-regulating organisation, recognised investment exchange or recognised clearing house that there are circumstances such that (apart from the delegation order) he would have been able to exercise any of the powers conferred by subsection (3) of section 119 above he may, notwithstanding the delegation order, himself exercise the power conferred by paragraph (a) of that subsection or direct the designated agency to exercise the power conferred by paragraph (b) or (c) of that subsection in such manner as he may specify.
121Designated agencies
(1)The Secretary of State shall not make a delegation order transferring any function to a designated agency unless he is satisfied that any rules, regulations and guidance of which copies are furnished to him under section 114(9) or (10) above do not have, and are not intended or likely to have, to any significant extent the effect of restricting, distorting or preventing competition or, if they have or are intended or likely to have that effect to any significant extent, that the effect is not greater than is necessary for the protection of investors.
(2)The powers conferred by subsection (3) below shall be exercisable by the Secretary of State if at any time it appears to him that—
(a)any rules or regulations made by a designated agency in the exercise of functions transferred to it by a delegation order or any guidance issued by a designated agency;
(b)any practices of a designated agency; or
(c)any practices of persons who are subject to rules or regulations made by it in the exercise of those functions, have, or are intended or are likely to have, to any significant extent the effect of restricting, distorting or preventing competition and that that effect is greater than is necessary for the protection of investors.
(3)The powers exercisable under this subsection are—
(a)to make an order in respect of the agency under section 115(2) above as if the circumstances were such as are there mentioned; or
(b)to direct the agency to take specified steps for the purpose of securing that the rules, regulations, guidance or practices in question do not have the effect mentioned in subsection (2) above.
(4)The practices referred to in paragraph (b) of subsection (2) above are practices of the designated agency in its capacity as such; and the practices referred to in paragraph (c) of that subsection are practices in relation to business in respect of which the persons in question are subject to any such rules or regulations as are mentioned in paragraph (a) of that subsection and which are required or contemplated by those rules or regulations or by any such guidance as is there mentioned or are otherwise attributable to the conduct of the agency in its capacity as such.
Consultation with Director General of Fair Trading

122Reports by Director General of Fair Trading
(1)The Secretary of State shall before deciding—
(a)whether to refuse to make, or to refuse leave for the making of, a recognition order in pursuance of section 119(1) or 120(2) above; or
(b)whether he is precluded by section 121(1) above from making a delegation order, send to the Director General of Fair Trading (in this Chapter referred to as " the Director ") a copy of the rules and regulations and of any guidance or arrangements which the Secretary of State is required to consider in making that decision together with such other information as the Secretary of State considers will assist the Director in discharging his functions under subsection (2) below.
(2)The Director shall report to the Secretary of State whether. In his opinion, the rules, regulations, guidance or arrangements of which copies are sent to him under subsection (1) above have, or are intended or likely to have, to any significant extent the effect of restricting, distorting, or preventing competition and, if so, what that effect is likely to be ; and in making any such decision as is mentioned in that subsection the Secretary of State shall have regard to the Director's report.
(3)The Secretary of State shall send the Director copies of any notice received by him under section 14(6), 41(5) or (6) or 120(3) above or under paragraph 4 of Schedule 9 to this Act together with such other information as the Secretary of State considers will assist the Director in discharging his functions under subsections (4) and (5) below.
(4)The Director shall keep under review—
(a)the rules, guidance, arrangements and regulations mentioned in section 119(2) and 121(2) above; and
(b)the matters specified in the notices of which copies are sent to him under subsection (3) above ; and if at any time he is of the opinion that any such rules, guidance, arrangements, regulations or matters, or any such rules, guidance, arrangements or regulations taken together with any such matters, have, or are intended or likely to have, to any significant extent the effect mentioned in subsection (2) above, he shall make a report to the Secretary of State stating his opinion and what that effect is or is likely to be.
(5)The Director may report to the Secretary of State his opinion that any such matter as is mentioned in subsection (4)(b) above does not in his opinion have, and is not intended or likely to have, to any significant extent the effect mentioned in subsection (2) above.
(6)The Director may from time to time consider whether any such practices as are mentioned in section 119(2) or 121(2) above have, or are intended or likely to have, to any significant extent the effect mentioned in subsection (2) above and, if so, what that effect is or is likely to be; and if he is of that opinion he shall make a report to the Secretary of State stating his opinion and what the effect is or is likely to be.
(7)The Secretary of State shall not exercise his powers under section 119(3), 120(4) or 121(3) above except after receiving and considering a report from the Director under subsection (4) or (6) above.
(8)The Director may, if he thinks fit, publish any report made by him under this section but shall exclude from a published report, so far as practicable, any matter which relates to the affairs of a particular person (other than the self-regulating organisation, investment exchange, clearing house or designated agency concerned) the publication of which would or might in his opinion seriously and prejudicially affect the interests of that person.
123Investigations by Director General of Fair Trading
(1)For the purpose of investigating any matter with a view to its consideration under section 122 above the Director may by a notice in writing—
(a)require any person to produce, at a time and place specified in the notice, to the Director or to any person appointed by him for the purpose, any documents which are specified or described in the notice and which are documents in his custody or under his control and relating to any matter relevant to the investigation ; or
(b)require any person carrying on any business to furnish to the Director such information as may be specified or described in the notice, and specify the time within which, and the manner and form in which, any such information is to be furnished.
(2)A person shall not under this section be required to produce any document or disclose any information which he would be entitled to refuse to produce or disclose on grounds of legal professional privilege in proceedings in the High Court or on grounds of confidentiality as between client and professional legal adviser in proceedings in the Court of Session.
(3)Subsections (5) to (8) of section 85 of the Fair Trading Act 1973 (enforcement provisions) shall apply in relation to a notice under this section as they apply in relation to a notice under subsection (1) of that section.
Consequential exemptions from competition law

124The Fair Trading Act 1973
(1)For the purpose of determining whether a monopoly situation within the meaning of the Fair Trading Act 1973 exists by reason of the circumstances mentioned in section 7(1 )(c) of that Act, no account shall be taken of—
(a)the rules made or guidance issued by a recognised self regulating organisation, recognised investment exchange or recognised clearing house or any conduct constituting such a practice as is mentioned in section 119(2) above;
(b)any clearing arrangements or any conduct required or contemplated by any such arrangements; or
(c)the rules or regulations made or guidance issued by a designated agency in the exercise of functions transferred to it by a delegation order or any conduct constituting such a practice as is mentioned in section 121(2) above.
(2)Where a recognition order is revoked there shall be disregarded for the purpose mentioned in subsection (1) above any such conduct as is mentioned in that subsection which occurred while the order was in force.
(3)Where on a monopoly reference under section 50 or 51 of the said Act of 1973 falling within section 49 of that Act the Monopolies and Mergers Commission find that a monopoly situation within the meaning of that Act exists and—
(c)that the person (or, if more than one, any of the persons) in whose favour it exists is subject to the rules of a recognised self-regulating organisation, recognised investment exchange or recognised clearing house or to the rules or regulations made by a designated agency in the exercise of functions transferred to it by a delegation order; or
(b)that any such person's conduct in carrying on any business to which those rules or regulations relate is the subject of guidance issued by such an organisation, exchange, clearing house or agency; or
(c)that any such person is a party to any clearing arrangements ; or
(d)that the person (or, if more than one, any of the persons) in whose favour the monopoly situation exists is such an organisation, exchange or clearing house as is mentioned in paragraph (a) above or a designated agency, the Commission, in making their report on that reference, shall exclude from their consideration the question whether the rules, regulations, guidance or clearing arrangements or any acts or omissions of such an organisation, exchange, clearing house or agency as is mentioned in paragraph (d) above in its capacity as such operate, or may be expected to operate, against the public interest; and section 54(3) of that Act shall have effect subject to the provisions of this subsection.
125The Restrictive Trade Practices Act 1976
(1)The Restrictive Trade Practices Act 1976 shall not apply to any agreement for the constitution of a recognised self-regulating organisation, recognised investment exchange or recognised clearing house, including any term deemed to be contained in it by virtue of section 8(2) or 16(3) of that Act.
(2)The said Act of 1976 shall not apply to any agreement the parties to which consist of or include—
(a)any such organisation, exchange or clearing house as is mentioned in subsection (1) above ; or
(b)a person who is subject to the rules of any such organisation, exchange or clearing house or to the rules or regulations made by a designated agency in the exercise of functions transferred to it by a delegation order, by reason of any term the inclusion of which in the agreement is required or contemplated by the rules, regulations or guidance of that organisation, exchange, clearing house or agency.
(3)The said Act of 1976 shall not apply to any clearing arrangements or to any agreement between a recognised investment exchange and a recognised clearing house by reason of any term the inclusion of which in the agreement is required or contemplated by any clearing arrangements.
(4)Where the recognition order in respect of a self-regulating organisation, investment exchange or clearing house is revoked the foregoing provisions shall have effect as if the organisation, exchange or clearing house had continued to be recognised until the end of the period of six months beginning with the day on which the revocation takes effect.
(5)Where an agreement ceases by virtue of this section to be subject to registration—
(a)the Director shall remove from the register maintained by him under the said Act of 1976 any particulars which are entered or filed in that register in respect of the agreement; and
(b)any proceedings in respect of the agreement which are pending before the Restrictive Practices Court shall be discontinued.
(6)Where an agreement which has been exempt from registration by virtue of this section ceases to be exempt in consequence of the revocation of a recognition order, the time within which particulars of the agreement are to be furnished in accordance with section 24 of and Schedule 2 to the said Act of 1976 shall be the period of one month beginning with the day on which the agreement ceased to be exempt from registration.
(7)Where in the case of an agreement registered under the said Act of 1976 a term ceases to fall within subsection (2) or (3) above in consequence of the revocation of a recognition order and particulars of that term have not previously been furnished to the Director under section 24 of that Act, those particulars shall be furnished to him within the period of one month beginning with the day on which the term ceased to fall within that subsection.
(8)The Restrictive Trade Practices (Stock Exchange) Act 1984 shall cease to have effect.
126The Competition Act 1980
(1)No course of conduct constituting any such practice as is mentioned in section 119(2) or 121(2) above shall constitute an anti-competitive practice for the purposes of the Competition Act 1980.
(2)Where a recognition order or delegation order is revoked, there shall not be treated as an anti-competitive practice for the purposes of that Act any such course of conduct as is mentioned in subsection (1) above which occurred while the order was in force.
Recognised professional bodies

127Modification of Restrictive Trade Practices Act 1976 in relation to recognised professional bodies
(1)This section applies to—
(a)any agreement for the constitution of a recognised professional body, including any term deemed to be contained in it by virtue of section 16(3) of the Restrictive Trade Practices Act 1976 ; and
(b)any other agreement—
(i)the parties to which consist of or include such a body, a person certified by such a body or a member of such a body; and
(ii)to which that Act applies by virtue of any term the inclusion of which in the agreement is required or contemplated by rules or guidance of that body relating to the carrying on of investment business by persons certified by it.
(2)If it appears to the Secretary of State that the restrictions in an agreement to which this section applies—
(a)do not have, and are not intended or likely to have, to any significant extent the effect of restricting, distorting or preventing competition ; or
(b)if all or any of them have, or are intended or likely to have, that effect to any significant extent, that the effect is not greater than is necessary for the protection of investors, he may give a direction to the Director requiring him not to make an application to the Restrictive Practices Court under Part I of the said Act of 1976 in respect of the agreement.
(3)If it appears to the Secretary of State that one or more (but not all) of the restrictions in an agreement to which this section applies—
(a)do not have, and are not intended or likely to have, to any significant extent the effect mentioned in subsection (2) above; or
(b)if they have, or are intended or likely to have, that effect to any significant extent that the effect is not greater than is necessary for the protection of investors, he may make a declaration to that effect and give notice of it to the Director and the Restrictive Practices Court.
(4)The Restrictive Practices Court shall not in any proceedings begun by an application made after notice has been given to it of a declaration under this section make any finding or exercise any power under Part I of the said Act of 1976 in relation to a restriction in respect of which the declaration has effect.
(5)The Director shall not make any application to the Restrictive Practices Court under Part I of the said Act of 1976 in respect of any agreement to which this section applies unless—
(a)he has notified the Secretary of State of his intention to do so; and
(b)the Secretary of State has either notified him that he does not intend to give a direction or make a declaration under this section or has given him notice of a declaration in respect of it; and where the Director proposes to make any such application he shall furnish the Secretary of State with particulars of the agreement and the restrictions by virtue of which the said Act of 1976 applies to it and such other information as he considers will assist the Secretary of State in deciding whether to exercise his powers under this section or as the Secretary of State may request.
(6)The Secretary of State may—
(a)revoke a direction or declaration under this section;
(b)vary any such declaration; or
(c)give a direction or make a declaration notwithstanding a previous notification to the Director that he did not intend to give a direction or make a declaration, if he is satisfied that there has been a material change of circumstances such that the grounds for the direction or declaration have ceased to exist, that there are grounds for a different declaration or that there are grounds for giving a direction or making a declaration, as the case may be.
(7)The Secretary of State shall give notice to the Director of the revocation of a direction and to the Director and the Restrictive Practices Court of the revocation or variation of a declaration ; and no such variation shall have effect so as to restrict the powers of the Court in any proceedings begun by an application already made by the Director.
(8)A direction or declaration under this section shall cease to have effect if the agreement in question ceases to be one to which this section applies.
(9)This section applies to information provisions as it applies to restrictions.
Supplemental

128Supplementary provisions
(1)Before the Secretary of State exercises a power under section 119(3) (b) or (c) above, his power to refuse leave under section 120(2) above or his power to give a direction under section 120(4) above in respect of a self-regulating organisation, investment exchange or clearing house, or his power under section 121(3)(b) above in respect of a designated agency, he shall—
(a)give written notice of his intention to do so to the organisation, exchange, clearing house or agency and take such steps (whether by publication or otherwise) as he thinks appropriate for bringing the notice to the attention of any other person who in his opinion is likely to be affected by the exercise of the power ; and
(b)have regard to any representation made within such time as he considers reasonable by the organisation, exchange, clearing house or agency or by any such other person.
(2)A notice under subsection (1) above shall give particulars of the manner in which the Secretary of State proposes to exercise the power in question and state the reasons for which he proposes to act; and the statement of reasons may include matters contained in any report received by him under section 122 above.
(3)Any direction given under this Chapter shall, on the application of the person by whom it was given, be enforceable by mandamus or, in Scotland, by an order for specific performance under section 91 of the Court of Session Act 1868.
(4)The fact that any rules or regulations made by a recognised self-regulating organisation, investment exchange or clearing house or by a designated agency have been altered by or pursuant to a direction given by the Secretary of State under this Chapter shall not preclude their subsequent alteration or revocation by that organisation, exchange, clearing house or agency.
(5)In determining under this Chapter whether any guidance has, or is likely to have, any particular effect the Secretary of State and the Director may assume that the persons to whom it is addressed will act in conformity with it.
Part II
Insurance Business

129Application of investment business provisions to regulated insurance companies
Schedule 10 to this Act shall have effect with respect to the application of the foregoing provisions of this Act to regulated insurance companies, that is to say—
(a)insurance companies to which Part II of the Insurance Companies Act 1982 applies ; and
(b)insurance companies which are authorised persons by virtue of section 31 above.
130Restriction on promotion of contracts of insurance
(1)Subject to subsections (2) and (3) below, no person shall—
(a)issue or cause to be issued in the United Kingdom an advertisement—
(i)inviting any person to enter or offer to enter into a contract of insurance rights under which constitute an investment for the purposes of this Act, or
(ii)containing information calculated to lead directly or indirectly to any person doing so; or
(b)in the course of a business, advise or procure any person in the United Kingdom to enter into such a contract.
(2)Subsection (1) above does not apply where the contract of insurance referred to in that subsection is to be with—
(a)a body authorised under section 3 or 4 of the Insurance Companies Act 1982 to effect and carry out such contracts of insurance;
(b)a body registered under the enactments relating to friendly societies;
(c)an insurance company the head office of which is in a member State other than the United Kingdom and which is entitled to carry on there insurance business of the relevant class ;
(d)an insurance company which has a branch or agency in such a member State and is entitled under the law of that State to carry on there insurance business of the relevant class; and in this subsection " the relevant class " means the class of insurance business specified in Schedule 1 or 2 to the Insurance Companies Act 1982 into which the effecting and carrying out of the contract in question falls.
(3)Subsection (1) above also does not apply where—
(a)the contract of insurance referred to in that subsection is to be with an insurance company authorised to effect or carry out such contracts of insurance in any country or territory which is for the time being designated for the purposes of this section by an order made by the Secretary of State ; and
(b)any conditions imposed by the order designating the country or territory have been satisfied.
(4)The Secretary of State shall not make an order designating any country or territory for the purposes of this section unless he is satisfied that the law under which insurance companies are authorised and supervised in that country or territory affords adequate protection to policy holders and potential policy holders against the risk that the companies may be unable to meet their liabilities; and, if at any time it appears to him that the law of a country or territory which has been designated under this section does not satisfy that requirement, he may by a further order revoke the order designating that country or territory.
(5)An order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(6)Subject to subsections (7) and (8) below, any person who contravenes this section shall be guilty of an offence and liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;
(b)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
(7)A person who in the ordinary course of a business other than investment business issues an advertisement to the order of another person shall not be guilty of an offence under this section if he proves that the matters contained in the advertisement were not (wholly or in part) devised or selected by him or by any person under his direction or control and that he believed on reasonable grounds after due enquiry that the person to whose order the advertisement was issued was an authorised person.
(8)A person other than the insurance company with which the contract of insurance is to be mads shall not be guilty of an offence under this section if he proves that he believed on reasonable grounds after due enquiry that subsection (2) or (3) above applied in the case of the contravention in question.
131Contracts made after contravention of s. 130
(1)Where there has been a contravention of section 130 above, then, subject to subsections (3) and (4) below—
(a)the insurance company shall not be entitled to enforce any contract of insurance with which the advertisement, advice or procurement was concerned and which was entered into after the contravention occurred ; and
(b)the other party shall be entitled to recover any money or other property paid or transferred by him under the contract, together with compensation for any loss sustained by him as a result of having parted with it.
(2)The compensation recoverable under subsection (1) above shall be such as the parties may agree or as a court may, on the application of either party, determine.
(3)In a case where the contravention referred to in subsection (1) above was a contravention by the insurance company with which the contract was made, the court may allow the contract to be enforced or money or property paid or transferred under it to be retained if it is satisfied—
(a)that the person against whom enforcement is sought or who is seeking to recover the money or property was not influenced, or not influenced to any material extent, by the advertisement or, as the case may be, the advice in making his decision to enter into the contract; or
(b)that the advertisement or, as the case may be, the advice was not misleading as to the nature of the company with which the contract was to be made or the terms of the contract and fairly stated any risks involved in entering into it.
(4)In a case where the contravention of section 130 above referred to in subsection (1) above was a contravention by a person other than the insurance company with which the contract was made the court may allow the contract to be enforced or money or property paid or transferred under it to be retained if it is satisfied that at the time the contract was made the company had no reason to believe that any contravention of section 130 above had taken place in relation to the contract.
(5)Where a person elects not to perform a contract which by virtue of subsection (1) above is unenforceable against him or by virtue of that subsection recovers money paid or other property transferred by him under a contract he shall not be entitled to any benefits under the contract and shall repay any money and return any other property received by him under the contract.
(6)Where any property transferred under a contract to which this section applies has passed to a third party the references to that property in this section shall be construed as references to its value at the time of its transfer under the contract.
(7)A contravention of section 130 above by an authorised person shall be actionable at the suit of any person who suffers loss as a result of the contravention.
(8)Section 61 above shall have effect in relation to a contravention or proposed contravention of section 130 above as it has effect in relation to a contravention or proposed contravention of section 57 above.
132Insurance contracts effected in contravention of s. 2 of Insurance Companies Act 1982
(1)Subject to subsection (3) below, a contract of insurance (not being an agreement to which section 5(1) above applies) which is entered into by a person in the course of carrying on insurance business in contravention of section 2 of the Insurance Companies Act 1982 shall be unenforceable against the other party; and that party shall be entitled to recover any money or other property paid or transferred by him under the contract, together with compensation for any loss sustained by him as a result of having parted with it.
(2)The compensation recoverable under subsection (1) above shall be such as the parties may agree or as a court may, on the application of either party, determine.
(3)A court may allow a contract to which subsection (1) above applies to be enforced or money or property paid or transferred under it to be retained if it is satisfied—
(a)that the person carrying on insurance business reasonably believed that his entering into the contract did not constitute a contravention of section 2 of the said Act of 1982; and
(b)that it is just and equitable for the contract to be enforced or, as the case may be, for the money or property paid or transferred under it to be retained.
(4)Where a person elects not to perform a contract which by virtue of this section is unenforceable against him or by virtue of this section recovers money or property paid or transferred under a contract he shall not be entitled to any benefits under the contract and shall repay any money and return any other property received by him under the contract.
(5)Where any property transferred under a contract to which this section applies has passed to a third party the references to that property in this section shall be construed as references to its value at the time of its transfer under the contract.
(6)A contravention of section 2 of the said Act of 1982 shall not make a contract of insurance illegal or invalid to any greater extent than is provided in this section; and a contravention of that section in respect of a contract of insurance shall not affect the validity of any re-insurance contract entered into in respect of that contract.
133Misleading statements as to insurance contracts
(1)Any person who—
(a)makes a statement, promise or forecast which he knows to be misleading, false or deceptive or dishonestly conceals any material facts ; or
(b)recklessly makes (dishonestly or otherwise) a statement, promise or forecast which is misleading, false or deceptive, is guilty of an offence if he makes the statement, promise or forecast or conceals the facts for the purpose of inducing, or is reckless as to whether it may induce, another person (whether or not the person to whom the statement, promise or forecast is made or from whom the facts are concealed) to enter into or offer to enter into, or to refrain from entering or offering to enter into, a contract of insurance with an insurance company (not being an investment agreement) or to exercise, or refrain from exercising, any rights conferred by such a contract.
(2)Subsection (1) above does not apply unless—
(a)the statement, promise or forecast is made in or from, or the facts are concealed in or from, the United Kingdom;
(b)the person on whom the inducement is intended to or may have effect is in the United Kingdom ; or
(c)the contract is or would be entered into or the rights are or would be exercisable in the United Kingdom.
(3)A person guilty of an offence under this section shall be liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding seven years or to a fine or to both ;
(b)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
134Controllers of insurance companies
In section 7(4)(c)(ii) of the Insurance Companies Act 1982 (definition of controller by reference to exercise of not less than one-third of voting power) for the words " one-third " there shall be substituted the words
“15 per cent.”.
135Communication by auditor with Secretary of State
(1)After section 21 of the Insurance Companies Act 1982 there shall be inserted— “Communication by auditor with Secretary of State. 21 A.—
(1)No duty to which an auditor of an insurance company to which this Part of this Act applies may be subject shall be regarded as contravened by reason of his communicating in good faith to the Secretary of State, whether or not in response to a request from him, any information or opinion on a matter of which the auditor has become aware in his capacity as auditor of that company and which is relevant to any functions of the Secretary of State under this Act.
(2)If it appears to the Secretary of State that any auditor or class of auditor to whom subsection (1) above applies is not subject to satisfactory rules made or guidance issued by a professional body specifying circumstances in which matters are to be communicated to the Secretary of State as mentioned in that subsection the Secretary of State may make regulations applying to that auditor or class of auditor and specifying such circumstances; and it shall be the duty of an auditor to whom the regulations made by the Secretary of State apply to communicate a matter to the Secretary of State in the circumstances specified by the regulations.
(3)The matters to be communicated to the Secretary of State in accordance with any such rules or guidance or regulations may include matters relating to persons other than the company.
(4)No regulations shall be made under subsection (2) above unless a draft of them has been laid before and approved by a resolution of each House of Parliament.
(5)If it appears to the Secretary of State that an auditor has failed to comply with the duty mentioned in subsection (2) above, the Secretary of State may disqualify him from being the auditor of an insurance company or any class of insurance company to which Part II of this Act applies; but the Secretary of State may remove any disqualification imposed under this subsection if satisfied that the person in question will in future comply with that duty.
(6)An insurance company to which this Part of this Act applies shall not appoint as auditor a person disqualified under subsection (5) above.”.
(2)In section 71(7) of that Act (which lists the provisions of that Act default in complying with which is not an offence) after the words " section 16 " there shall be inserted the word
“21A”
, and in section 97(4) of that Act (which provides that regulations under that Act are to be subject to annulment) after the word " Act" there shall be inserted the words
“, except regulations under section 21A(3),”.
136Arrangements to avoid unfairness between separate insurance funds etc.
(1)After section 31 of the Insurance Companies Act 1982 there shall be inserted— “Arrangements to avoid unfairness between separate insurance funds etc. 31 A.—
(1)An insurance company to which this Part of this Act applies which carries on long term business in the United Kingdom shall secure that adequate arrangements are in force for securing that transactions affecting assets of the company (other than transactions outside its control) do not operate unfairly between the section 28 fund or funds and the other assets of the company or, in a case where the company has more than one identified fund, between those funds.
(2)In this section— " the section 28 fund or funds" means the assets representing the fund or funds maintained by the company under section 28(1) (b) above; and " identified fund ", in relation to a company, means assets representing the company's receipts from a particular part of its long term business which can be identified as such by virtue of accounting or other records maintained by the company.”
(2)In section 71(7) of that Act (which lists the provisions of that Act default in complying with which is not an offence) before the word " or " there shall be inserted the word
“31A”.
137Regulations in respect of linked long term policies
In section 78(2) of the Insurance Companies Act 1982 (regulations in respect of linked long term policies) after paragraph (a) there shall be inserted—
“(aa)restricting the proportion of those benefits which may be determined by reference to property of a specified description or a specified index ;”.
138Insurance brokers
(1)Rules made under section 8 of the Insurance Brokers (Registration) Act 1977 may require an applicant for registration or enrolment to state whether he is an authorised person or exempted person under Part I of this Act and, if so, to give particulars of the authorisation or exemption; and an individual shall be treated as satisfying the requirements of section 3(2)(a) of that Act (applicant for registration to satisfy Council as to his character and suitability) if he is an authorised person or a member of a partnership or unincorporated association which is an authorised person.
(2)In drawing up any statement under section 10 of that Act or making any rules under section 11 or 12 of that Act after the coming into force of this section the Insurance Brokers Registration Council shall take proper account of any provisions applicable to, and powers exercisable in relation to, registered insurance brokers or enrolled bodies corporate under this Act.
(3)In section 12(1) and (2) of that Act (which requires the Council to make professional indemnity rules) for the words " The Council shall " there shall be substituted the words
“The Council may”.
(4)In section 15 of that Act (erasure from register and list for unprofessional conduct etc.) after subsection (2) there shall be inserted—
“(2A)The Disciplinary Committee may, if they think fit, direct that the name of a registered insurance broker or enrolled body corporate shall be erased from the register or list if it appears to the Committee that any responsible person has concluded that the broker (or a related person) or the body corporate has contravened or failed to comply with—
(a)any provision of the Financial Services Act 1986 or any rule or regulation made under it to which he or it is or was subject at the time of the contravention or failure; or
(b)any rule of any recognised self-regulating organisation or recognised professional body (within the meaning of that Act), to which he is or was subject at that time.
(2B)In subsection (2A) above—
(a)" responsible person " means a person responsible under the Financial Services Act 1986 or under the rules of any recognised self-regulating organisation or recognised professional body (within the meaning of that Act) for determining whether any contravention of any provision of that Act or rules or regulations made under it or any rules of that organisation or body has occurred ; and
(b)" related person" means a partnership or unincorporated association of which the broker in question is (or was at the time of the failure or contravention in question) a member or a body corporate of which he is (or was at that time) a director.”
(5)The Insurance Brokers Registration Council shall cooperate, by the sharing of information and otherwise, with the Secretary of State and any other authority, body or person having responsibility for the supervision or regulation of investment business or other financial services.
(6)For the purposes of the said Act of 1977 " authorised insurers " shall include—
(a)an insurance company the head office of which is in a member State other than the United Kingdom and which is entitled to carry on there insurance business corresponding to that mentioned in the definition of " authorised insurers "in that Act; and
(b)an insurance company which has a branch or agency in such a member State and is entitled under the law of that State to carry on there insurance business corresponding to that mentioned in that definition.
139Industrial assurance
(1)In section 5 of the Industrial Assurance Act 1923 (prohibition on issue of illegal policies) the references to policies which are illegal or not within the legal powers of a society or company shall not be construed as applying to any policy issued—
(a)in the course of carrying on investment business in contravention of section 3 above; or
(b)in the course of carrying on insurance business in contravention of section 2 of the Insurance Companies Act 1982.
(2)In section 20(4) of the said Act of 1923 the reference to a person employed by a collecting society or industrial assurance company and in section 34 of that Act the references to a person in the regular employment of such a society or company shall include references to an appointed representative of such a society or company but as respects section 34 only if the contract in question is an investment agreement.
(3)Where it appears to the Industrial Assurance Commissioner that rules made by virtue of section 48(2)(f) (or corresponding rules made by a recognised self-regulating organisation) make arrangements for the settlement of a dispute referred to him under section 32 of the said Act of 1923 or that such rules relate to some of the matters in dispute he may, if he thinks fit, delegate his functions in respect of the dispute so as to enable it to be settled in accordance with the rules.
(4)If such rules provide that any dispute may be referred to the Industrial Assurance Commissioner he may deal with any dispute referred to him in pursuance of those rules as if it were a dispute referred under section 77 of the Friendly Societies Act 1974 and may delegate his functions in respect of any such dispute to any other person.
(5)The foregoing provisions of this section shall apply to Northern Ireland with the substitution for the references to sections 5, 20(4), 32 and 34 of the said Act of 1923 and section 77 of the said Act of 1974 of references to Articles 20, 27(2), 36 and 38 of the Industrial Assurance (Northern Ireland) Order 1979 and section 65 of the Friendly Societies Act (Northern Ireland) 1970 and for the references to the Industrial Assurance Commissioner of references to the Industrial Assurance Commissioner for Northern Ireland.
Part III
Friendly Societies

140Friendly societies
Schedule 11 to this Act shall have effect as respects the regulation of friendly societies.
141Indemnity schemes
(1)Any two or more registered friendly societies may, notwithstanding any provision to the contrary in their rules, enter into arrangements for the purpose of making funds available to meet losses incurred by any society which is a party to the arrangements or by the members of any such society by virtue of their membership of it.
(2)No such arrangements shall come into force unless they have been approved by the Chief Registrar of friendly societies or, as the case may be, the Registrar of Friendly Societies for Northern Ireland.
Part IV
Official Listing of Securities

142Official listing
(1)No investment to which this section applies shall be admitted to the Official List of The Stock Exchange except in accordance with the provisions of this Part of this Act.
(2)Subject to subsections (3) and (4) below, this section applies to any investment falling within paragraph 1, 2, 4 or 5 of Schedule 1 to this Act
(3)In the application of those paragraphs for the purposes of subsection (2) above—
(a)paragraphs 1, 4 and 5 shall have effect as if paragraph 1 did not contain the exclusion relating to building societies, industrial and provident societies or credit unions;
(b)paragraph 2 shall have effect as if it included any instrument falling within paragraph 3 issued otherwise than by the government of a member State or a local authority in a member State ; and
(c)paragraphs 4 and 5 shall have effect as if they referred only to investments falling within paragraph 1.
(4)The Secretary of State may by order direct that this section shall apply also to investments falling within paragraph 6 of Schedule 1 to this Act or to such investments of any class or description.
(5)An order under subsection (4) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(6)In this Part of this Act " the competent authority " means, subject to section 157 below, the Council of The Stock Exchange ; and that authority may make rules (in this Act referred to as " listing rules ") for the purposes of any of the following provisions.
(7)In this Part of this Act—
" issuer ", in relation to any securities, means the person by whom they have been or are to be issued except that in relation to a certificate or other instrument falling within paragraph 5 of Schedule 1 to this Act it means the person who issued or is to issue the securities to which the certificate or instrument relates ;
" the Official List" means the Official List of The Stock Exchange;
" securities " means investments to which this section applies ;
and references to listing are references to inclusion in the Official List in pursuance of this Part of this Act.
(8)Any functions of the competent authority under this Part of this Act may be exercised by any committee, sub-committee, officer or servant of the authority except that listing rules—
(a)shall be made only by the authority itself or by a committee or sub-committee of the authority; and
(b)if made by a committee or sub-committee, shall cease to have effect at the end of the period of twenty-eight days beginning with the day on which they are made (but without prejudice to anything done under them) unless before the end of that period they are confirmed by the authority.
(9)Nothing in this Part of this Act affects the powers of the Council of The Stock Exchange in respect of investments to which this section does not apply and such investments may be admitted to the Official List otherwise than in accordance with this Part of this Act
143Applications for listing
(1)An application for listing shall be made to the competent authority in such manner as the listing rules may require.
(2)No application for the listing of any securities shall be made except by or with the consent of the issuer of the securities.
(3)No application for listing shall be made in respect of securities to be issued by a private company or by an old public company within the meaning of section 1 of the Companies Consolidation (Consequential Provisions) Act 1985 or the corresponding Northern Ireland provision.
144Admission to list
(1)The competent authority shall not admit any securities to the Official List except on an application duly made in accordance with section 143 above and unless satisfied that—
(a)the requirements of the listing rules made by the authority for the purposes of this section and in force when the application is made; and
(b)any other requirements imposed by the authority in relation to that application, are complied with.
(2)Without prejudice to the generality of the power of the competent authority to make listing rules for the purposes of this section, such rules may, in particular, require as a condition of the admission of any securities to the Official List—
(a)the submission to, and approval by, the authority of a document (in this Act referred to as " listing particulars ") in such form and containing such information as may be specified in the rules; and
(b)the publication of that document; or, in such cases as may be specified by the rules, the publication of a document other than listing particulars.
(3)The competent authority may refuse an application—
(a)if it considers that by reason of any matter relating to the issuer the admission of the securities would be detrimental to the interests of investors; or
(b)in the case of securities already officially listed in another member State, if the issuer has failed to comply with any obligations to which he is subject by virtue of that listing.
(4)The competent authority shall notify the applicant of its decision on the application within six months from the date on which the application is received or, if within that period the authority has required the applicant to furnish further information in connection with the application, from the date on which that information is furnished.
(5)If the competent authority does not notify the applicant of its decision within the time required by subsection (4) above it shall be taken to have refused die application.
(6)When any securities have been admitted to the Official List their admission shall not be called in question on the ground that any requirement or condition for their admission has not been complied with.
145Discontinuance and suspension of listing
(1)The competent authority may, in accordance with the listing rules, discontinue the listing of any securities if satisfied that there are special circumstances which preclude normal regular dealings in the securities.
(2)The competent authority may in accordance with the listing rules suspend the listing of any securities.
(3)Securities the listing of which is suspended under subsection (2) above shall nevertheless be regarded as listed for the purposes of sections 153 and 155 below.
(4)This section applies to securities included in the Official List at the coming into force of this Part of this Act as it applies to securities included by virtue of this Part.
146General duty of disclosure in listing particulars
(1)In addition to the information specified by listing rules or required by the competent authority as a condition of the admission of any securities to the Official List any listing particulars submitted to the competent authority under section 144 above shall contain all such information as investors and their professional advisers would reasonably require, and reasonably expect to find there, for the purpose of making an informed assessment of—
(a)the assets and liabilities, financial position, profits and losses, and prospects of the issuer of the securities; and
(b)the rights attaching to those securities.
(2)The information to be included by virtue of this section shall be such information as is mentioned in subsection (1) above which is within the knowledge of any person responsible for the listing particulars or which it would be reasonable for him to obtain by making enquiries.
(3)In determining what information is required to be included in listing particulars by virtue of this section regard shall be had—
(a)to the nature of the securities and of the issuer of the securities;
(b)to the nature of the persons likely to consider their acquisition;
(c)to the fact that certain matters may reasonably be expected to be within the knowledge of professional advisers of any kind which those persons may reasonably be expected to consult; and
(d)to any information available to investors or their professional advisers by virtue of requirements imposed under section 153 below or by or under any other enactment or by virtue of requirements imposed by a recognised investment exchange for the purpose of complying with paragraph 2{2)(b) of Schedule 4 to this Act.
147Supplementary listing particulars
(1)If at any time after the preparation of listing particulars for submission to the competent authority under section 144 above and before the commencement of dealings in the securities following their admission to the Official List—
(a)there is a significant change affecting any matter contained in those particulars whose inclusion was required by section 146 above or by listing rules or by the competent authority; or
(b)a significant new matter arises the inclusion of information in respect of which would have been so required if it had arisen when the particulars were prepared, the issuer of the securities shall, in accordance with listing rules made for the purposes of this section, submit to the competent authority for its approval and, if approved, publish supplementary listing particulars of the change or new matter.
(2)In subsection (1) above "significant" means significant for the purpose of making an informed assessment of the matters mentioned in section 146(1) above.
(3)Where the issuer of the securities is not aware of the change or new matter in question he shall not be under any duty to comply with subsection (1) above unless he is notified of it by a person responsible for the listing particulars ; but it shall be the duty of any person responsible for those particulars who is aware of such a matter to give notice of it to the issuer.
(4)Subsection (1) above applies also as respects matters contained in any supplementary listing particulars previously published under this section in respect of the securities in question.
148Exemptions from disclosure
(1)The competent authority may authorise the omission from listing particulars or supplementary listing particulars of any information the inclusion of which would otherwise be required by section 146 above—
(a)on the ground that its disclosure would be contrary to the public interest;
(b)subject to subsection (2) below, on the ground that its disclosure would be seriously detrimental to the issuer of the securities ; or
(c)in the case of securities which fall within paragraph 2 of Schedule 1 to this Act as modified by section 142 (3)(b) above and are of any class specified by listing rules, on the ground that its disclosure is unnecessary for persons of the kind who may be expected normally to buy or deal in the securities.
(2)No authority shall be granted under subsection (l)(b) above in respect of, and no such authority shall be regarded as extending to, information the non-disclosure of which would be likely to mislead a person considering the acquisition of the securities as to any facts the knowledge of which it is essential for him to have in order to make an informed assessment.
(3)The Secretary of State or the Treasury may issue a certificate to the effect that the disclosure of any information (including information that would otherwise have to be included in particulars for which they are themselves responsible) would be contrary to the public interest and the competent authority shall be entitled to act on any such certificate in exercising its powers under subsection (l)(a) above.
(4)This section is without prejudice to any powers of the competent authority under rules made by virtue of section 156(2) below.
149Registration of listing particulars
(1)On or before the date on which listing particulars or supplementary listing particulars are published as required by listing rules a copy of the particulars shall be delivered for registration to the registrar of companies and a statement that a copy has been delivered to him shall be included in the particulars.
(2)In subsection (1) above " the registrar of companies" means—
(a)if the securities in question are or are to be issued by a company incorporated in Great Britain, the registrar of companies in England and Wales or the registrar of companies in Scotland according to whether the company's registered office is in England and Wales or in Scotland;
(b)if the securities in question are or are to be issued by a company incorporated in Northern Ireland, the registrar of companies for Northern Ireland ;
(c)in any other case, any of those registrars.
(3)If any particulars are published without a copy of them having been delivered as required by this section the issuer of the securities in question and any person who is knowingly a party to the publication shall be guilty of an offence and liable—
(a)on conviction on indictment, to a fine ;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
150Compensation for false or misleading particulars
(1)Subject to section 151 below, the person or persons responsible for any listing particulars or supplementary listing particulars shall be liable to pay compensation to any person who has acquired any of the securities in question and suffered loss in respect of them as a result of any untrue or misleading statement in the particulars or the omission from them of any matter required to be included by section 146 or 147 above.
(2)Where listing rules require listing particulars to include information as to any particular matter on the basis that the particulars must include a statement either as to that matter or, if such is the case, that there is no such matter, the omission from the particulars of the information shall be treated for the purposes of subsection (1) above as a statement that there is no such matter.
(3)Subject to section 151 below, a person who fails to comply with section 147 above shall be liable to pay compensation to any person who has acquired any of the securities in question and suffered loss in respect of them as a result of the failure.
(4)This section does not affect any liability which any person may incur apart from this section.
(5)References in this section to the acquisition by any person of securities include references to his contracting to acquire them or an interest in them.
(6)No person shall by reason of being a promoter of a company or otherwise incur any liability for failing to disclose any information which he would not be required to disclose in listing particulars in respect of a company's securities if he were responsible for those particulars or, if he is responsible for them, which he is entitled to omit by virtue of section 148 above.
151Exemption from liability to pay compensation
(1)A person shall not incurr any liability under section 150(1) above for any loss in respect of securities caused by any such statement or omission as is there mentioned if he satisfies the court that at the time when the particulars were submitted to the competent authority he reasonably believed, having made such enquiries (if any) as were reasonable, that the statement was true and not misleading or that the matter whose omission caused the loss was properly omitted and—
(a)that he continued in that belief until the time when the securities were acquired; or
(b)that they were acquired before it was reasonably practicable to bring a correction to the attention of persons likely to acquire the securities in question ; or
(c)that before the securities were acquired he had taken all such steps as it was reasonable for him to have taken to secure that a correction was brought to the attention of those persons ; or
(d)that he continued in that belief until after the commencement of dealings in the securities following their admission to the Official List and that the securities were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.
(2)A person shall not incur any liability under section 150(1) above for any loss in respect of securities caused by a statement purporting to be made by or on the authority of another person as an expert which is, and is stated to be, included in the particulars with that other person's consent if he satisfies the court that at the time when the particulars were submitted to the competent authority he believed on reasonable grounds that the other person was competent to make or authorise the statement and had consented to its inclusion in the form and context in which it was included and—
(a)that he continued in that belief until the time when the securities were acquired; or
(b)that they were acquired before it was reasonably practicable to bring the fact that the expert was not competent or had not consented to the attention of persons likely to acquire the securities in question ; or
(c)that before the securities were acquired he had taken all such steps as it was reasonable for him to have taken to secure that that fact was brought to the attention of those persons ; or
(d)that he continued in that belief until after the commencement of dealings in the securities following their admission to the Official List and that the securities were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused.
(3)Without prejudice to subsections (1) and (2) above, a person shall not incur any liability under section 150(1) above for any loss in respect of any securities caused by any such statement or omission as is there mentioned if he satisfies the court—
(a)that before the securities were acquired a correction, or where the statement was such as is mentioned in subsection (2), the fact that the expert was not competent or had not consented had been published in a manner calculated to bring it to the attention of persons likely to acquire the securities in question ; or
(b)that he took all such steps as it was reasonable for him to take to secure such publication and reasonably believed that it had taken place before the securities were acquired.
(4)A person shall not incur any liability under section 150(1) above for any loss resulting from a statement made by an official person or contained in a public official document which is included in the particulars if he satisfies the court that the statement is accurately and fairly reproduced.
(5)A person shall not incur any liability under section 150(1) or (3) above if he satisfies the court that the person suffering the loss acquired the securities in question with knowledge that the statement was false or misleading, of the omitted matter or of the change or new matter, as the case may be.
(6)A person shall not incur any liability under section 150(3) above if he satisfies the court that he reasonably believed that the change or new matter in question was not such as to call for supplementary listing particulars.
(7)In this section "expert" includes any engineer, valuer, accountant or other person whose profession, qualifications or experience give authority to a statement made by him; and references to the acquisition of securities include references to contracting to acquire them or an interest in them.
152Persons responsible for particulars
(1)For the purposes of this Part of this Act the persons responsible for listing particulars or supplementary listing particulars are—
(a)the issuer of the securities to which the particulars relate;
(b)where the issuer is a body corporate, each person who is a director of that body at the time when the particulars are submitted to the competent authority;
(c)where the issuer is a body corporate, each person who has authorised himself to be named, and is named, in the particulars as a director or as having agreed to become a director of that body either immediately or at a future time ;
(d)each person who accepts, and is stated in the particulars as accepting, responsibility for, or for any part of, the particulars;
(e)each person not falling within any of the foregoing paragraphs who has authorised the contents of, or any part of, the particulars.
(2)A person is not responsible for any particulars by virtue of subsection (1)(b) above if they are published without his knowledge or consent and on becoming aware of their publication he forthwith gives reasonable public notice that they were published without his knowledge or consent.
(3)Where a person has accepted responsibility for, or authorised, only part of the contents of any particulars, he is responsible under subsection (1)(d) or (e) above for only that part and only if it is included in (or substantially in) the form and context to which he has agreed.
(4)Where the particulars relate to securities which are to be issued in connection with an offer by (or by a wholly-owned subsidiary of), the issuer for, or an agreement for the acquistion by (or by a wholly-owned subsidiary of) the issuer of, securities issued by another person or in connection with any arrangement whereby the whole of the undertaking of another person is to become the undertaking of the issuer (of a wholly-owned subsidiary of the issuer or of a body corporate which will become such a subsidiary by virtue of the arrangement) then if—
(a)that other person ; and
(b)where that other person is a body corporate, each person who is a director of that body at the time when the particulars are submitted to the competent authority and each other person who has authorised himself to be named, and is named, in the particulars as a director of that body, is responsible by virtue of paragraph (d) of subsection (1) above for any part of the particulars relating to that other person or to the securities or undertaking to which the offer, agreement or arrangement relates, no person shall be responsible for that part under paragraph (a), (b) or (c) of that subsection but without prejudice to his being responsible under paragraph (d).
(5)Neither paragraph (b) nor paragraph (c) of subsection (1) above applies in the case of an issuer of international securities of a class specified by listing rules for the purposes of section 148(l)(c) above; and neither of those paragraphs nor paragraph (b) of subsection (4) above applies in the case of any director certified by the competent authority as a person to whom that paragraph should not apply by reason of his having an interest, or of any other circumstances, making it inappropriate for him to be responsible by virtue of that paragraph.
(6)In subsection (5) above " international securities " means any investment falling within paragraph 2 of Schedule 1 to this Act as modified by section 142(3)(b) above which is of a kind likely to be dealt in by bodies incorporated in or persons resident in a country or territory outside the United Kingdom, is denominated in a currency other than sterling or is otherwise connected with such a country or territory.
(7)In this section " wholly-owned subsidiary ", in relation to a person other than a body corporate, means any body corporate that would be his wholly-owned subsidiary if he were a body corporate.
(8)Nothing in this section shall be construed as making a person responsible for any particulars by reason of giving advice as to their contents in a professional capacity.
(9)Where by virtue of this section the issuer of any shares pays or is liable to pay compensation under section 150 above for loss suffered in respect of shares for which a person has subscribed no account shall be taken of that liability or payment in determining any question as to the amount paid on subscription for those shares or as to the amount paid up or deemed to be paid up on them.
153Obligations of issuers of listed securities
(1)Listing rules may specify requirements to be complied with by issuers of listed securities and make provision with respect to the action that may be taken by the competent authority in the event of non-compliance, including provision—
(a)authorising the authority to publish the fact that an issuer has contravened any provision of the rules; and
(b)if the rules require an issuer to publish any information, authorising the authority to publish it in the event of his failure to do so.
(2)This section applies to the issuer of securities included in the Official List at the coming into force of this Part of this Act as it applies to the issuer of securities included by virtue of this Part.
154Advertisements etc. in connection with listing applications
(1)Where listing particulars are or are to be published in connection with an application for the listing of any securities no advertisement or other information of a kind specified by listing rules shall be issued in the United Kingdom unless the contents of the advertisement or other information have been submitted to the competent authority and that authority has either—
(a)approved those contents; or
(b)authorised the issue of the advertisement or information without such approval.
(2)An authorised person who contravenes this section shall be treated as having contravened rules made under Chapter V of Part I of this Act or, in the case of a person who is an authorised person by virtue of his membership of a recognised self-regulating organisation or certification by a recognised professional body, the rules of that organisation or body.
(3)Subject to subsection (4) below, a person other than an authorised person, who contravenes this section shall be guilty of an offence and liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
(4)A person who in the ordinary course of a business other than investment business issues an advertisement or other information to the order of another person shall not be guilty of an offence under this section if he proves that he believed on reasonable grounds that the advertisement or information had been approved or its issue authorised by the competent authority.
(5)Where information has been approved, or its issue has been authorised, under this section neither the person issuing it nor any person responsible for, or for any part of, the listing particulars shall incur any civil liability by reason of any statement in or omission from the information if that information and the listing particulars, taken together, would not be likely to mislead persons of the kind likely to consider the acquisition of the securities in question.
155Fees
Listing rules may require the payment of fees to the competent authority in respect of applications for listing and the retention of securities in the Official List
156Listing rules: general provisions
(1)Listing rules may make different provision for different cases.
(2)Listing rules may authorise the competent authority to dispense with or modify the application of the rules in particular cases and by reference to any circumstances.
(3)Listing rules shall be made by an instrument in writing.
(4)Immediately after an instrument containing listing rules is made it shall be printed and made available to the public with or without payment.
(5)A person shall not be taken to have contravened any listing rule if he shows that at the time of the alleged contravention the instrument containing the rule had not been made available as required by subsection (4) above.
(6)The production of a printed copy of an instrument purporting to be made by the competent authority on which is endorsed a certificate signed by an officer of the authority authorised by it for that purpose and stating—
(a)that the instrument was made by the authority;
(b)that the copy is a true copy of the instrument; and
(c)that on a specified date the instrument was made available to the public as required by subsection (4) above, shall be prima facie evidence or, in Scotland, sufficient evidence of the facts stated in the certificate.
(7)Any certificate purporting to be signed as mentioned in subsection (6) above shall be deemed to have been duly signed unless the contrary is shown.
(8)Any person wishing in any legal proceedings to cite an instrument made by the competent authority may require the authority to cause a copy of it to be endorsed with such a certificate as is mentioned in subsection (6) above.
157Alteration of competent authority
(1)The Secretary of State may by order transfer the functions as competent authority of the Council of The Stock Exchange to another body or other bodies either at the request of the Council or if it appears to him—
(a)that the Council is exercising those functions in a manner which is unnecessary for the protection of investors and fails to take into account the proper interests of issuers and proposed issuers of securities; or
(b)that it is necessary to do so for the protection of investors.
(2)The Secretary of State may by order transfer all or any of the functions as competent authority from any body or bodies to which they have been previously transferred under this section to another body or bodies.
(3)Any order made under subsection (1) above at the request of the Council shall be subject to annulment in pursuance of a resolution of either House of Parliament; and no other order shall be made under this section unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
(4)An order under this section shall not affect anything previously done by any body (" the previous authority ") in the exercise of functions which are transferred by the order to another body (" the new authority ") and may contain such supplementary provisions as the Secretary of State thinks necessary or expedient, including provisions—
(a)for modifying or excluding any provision of this Part of this Act in its application to any such functions;
(b)for the transfer of any property, rights or liabilities relating to any such functions from the previous authority to the new authority;
(c)for the carrying on and completion by the new authority of anything in process of being done by the previous authority when the order takes effect; and
(d)for the substitution of the new authority for the previous authority in any instrument, contract or legal proceedings.
(5)If by virtue of this section the function of admission to or discontinuance or suspension of listing is exercisable otherwise than by the Council of The Stock Exchange, references in this Part of this Act to the competent authority admitting securities to the Official List or to discontinuing or suspending the listing of any securities shall be construed as references to the giving of directions to the Council of The Stock Exchange to admit the securities or to discontinue or suspend their listing; and it shall be the duty of the Council to comply with any such direction.
Part V
Offers of Unlisted Securities

158Preliminary
(1)This Part of this Act applies to any investment—
(a)which is not listed, or the subject of an application for listing, in accordance with Part IV of this Act; and
(b)falls within paragraph 1, 2, 4 or 5 of Schedule 1 to this Act
(2)In the application of those paragraphs for the purposes of subsection (1) above—
(a)paragraphs 4 and 5 shall have effect with the omission of references to investments falling within paragraph 3; and
(b)paragraph 4 shall have effect as if it referred only to instruments issued by the person issuing the investment to be subscribed for.
(3)In this Part of this Act—
" issuer ", in relation to any securities, means the person by whom they have been or are to be issued except that in relation to a certificate or other instrument falling within paragraph 5 of Schedule 1 to this Act it means the person who issued or is to issue the securities to which the certificate or instrument relates;
" securities" means investments to which this section applies.
(4)For the purposes of this Part of this Act an advertisement offers securities if—
(a)it invites a person to enter into an agreement for or with a view to subscribing for or otherwise acquiring or underwriting any securities; or
(b)it contains information calculated to lead directly or indirectly to a person entering into such an agreement.
(5)In this Part of this Act " the registrar of companies ", in relation to any securities, means—
(a)if the securities are or are to be issued by a company incorporated in Great Britain, the registrar of companies in England and Wales or the registrar of companies in Scotland according to whether the company's registered office is in England and Wales or in Scotland ;
(b)if the securities are or are to be issued by a company incorporated in Northern Ireland, the registrar of companies for Northern Ireland ;
(c)in any other case, any of those registrars.
(6)In this Part of this Act " approved exchange ", in relation to dealings in any securities, means a recognised investment exchange approved by the Secretary of State for the purposes of this Part of this Act either generally or in relation to such dealings, and the Secretary of State shall give notice in such manner as he thinks appropriate of the exchanges which are for the time being approved.
159Offers of securities on admission to approved exchange
(1)Subject to subsection (2) and section 161 below, no person shall issue or cause to be issued in the United Kingdom an advertisement offering any securities on the occasion of their admission to dealings on an approved exchange or on terms that they will be issued if admitted to such dealings unless—
(a)a document (in this Part of this Act referred to as a " prospectus ") containing information about the securities has been submitted to and approved by the exchange and delivered for registration to the registrar of companies; or
(b)the advertisement is such that no agreement can be entered into in pursuance of it until such a prospectus has been submitted, approved and delivered as aforesaid.
(2)Subsection (1) above does not apply if a prospectus relating to the securities has been delivered for registration under this Part of this Act in the previous twelve months and the approved exchange certifies that it is satisfied that persons likely to consider acquiring the securities will have sufficient information to enable them to decide whether to do so from that prospectus and any information published in connection with the admission of the securities.
160Other offers of securities
(1)Subject to subsections (5) and (6) and section 161 below, no person shall issue or cause to be issued in the United Kingdom an advertisement offering any securities which is a primary or secondary offer within the meaning of this section unless—
(a)he has delivered for registration to the registrar of companies a prospectus relating to the securities and expressed to be in respect of the offer ; or
(b)the advertisement is such that no agreement can be entered into in pursuance of it until such a prospectus has been delivered by him as aforesaid.
(2)For the purposes of this section a primary offer is an advertisement issued otherwise than as mentioned in section 159(1) above inviting persons to enter into an agreement for or with a view to subscribing (whether or not in cash) for or underwriting the securities to which it relates or containing information calculated to lead directly or indirectly to their doing so.
(3)For the purposes of this section a secondary offer is any other advertisement issued otherwise than as mentioned in section 159(1) above inviting persons to enter into an agreement for or with a view to acquiring the securities to which it relates or containing information calculated to lead directly or indirectly to their doing so, being an advertisement issued or caused to be issued by—
(a)a person who has acquired the securities from the issuer with a view to issuing such an advertisement in respect of them;
(b)a person who, with a view to issuing such an advertisement in respect of them, has acquired the securities otherwise than from the issuer but without their having been admitted to dealings on an approved exchange or held by a person who acquired them as an investment and without any intention that such an advertisement should be issued in respect of them ; or
(c)a person who is a controller of the issuer or has been such a controller in the previous twelve months and who is acting with the consent or participation of the issuer in issuing the advertisement.
(4)For the purposes of subsection (3)(a) above it shall be presumed in the absence of evidence to the contrary that a person has acquired securities with a view to issuing an advertisement offering the securities if he issues it or causes it to be issued—
(a)within six months after the issue of the securities ; or
(b)before the consideration due from him for their acquisition is received by the person from whom he acquired them.
(5)Subsection (1) above does not apply to a secondary offer if such a prospectus as is mentioned in that subsection has been delivered in accordance with that subsection in respect of an offer of the same securities made in the previous six months by a person making a primary offer or a previous secondary offer.
(6)Subsection (1) above does not apply to an advertisement issued in such circumstances as may be specified by an order made by the Secretary of State for the purpose of exempting from that subsection—
(a)advertisements appearing to him to have a private character, whether by reason of a connection between the person issuing them and those to whom they are addressed or otherwise;
(b)advertisements appearing to him to deal with investments only incidentally;
(c)advertisements issued to persons appearing to him to be sufficiently expert to understand any risks involved; or
(d)such other classes of advertisement as he thinks fit.
(7)Without prejudice to subsection (6)(c) above an order made by the Secretary of State may exempt from subsection (1) above an advertisement issued in whatever circumstances if it relates to securities appearing to him to be of a kind that can be expected normally to be bought or dealt in only by persons sufficiently expert to understand any risks involved.
(8)An order under subsection (6) or (7) above may require any person who by virtue of the order is authorised to issue an advertisement to comply with such requirements as are specified in the order.
(9)An order made by virtue of subsection (6)(a), (b) or (c) or by virtue of subsection (7) above shall be subject to annulment in pursuance of a resolution of either House of Parliament; and no order shall be made by virtue of subsection (6)(d) above unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
161Exceptions
(1)Sections 159 and 160 above do not apply to any advertisement offering securities if the offer is conditional on their admission to listing in accordance with Part IV of this Act and section 159 above does not apply to any advertisement offering securities if they have been listed in accordance with that Part in the previous twelve months and the approved exchange in question certifies that persons likely to consider acquiring them will have sufficient information to enable them to decide whether to do so.
(2)Neither of those sections applies to any such advertisement as is mentioned in section 58(2) above.
(3)Neither of those sections applies if other securities issued by the same person (whether or not securities of the same class as those to which the offer relates) are already dealt in on an approved exchange and the exchange certifies that persons likely to consider acquiring the securities to which the offer relates will have sufficient information to enable them to decide whether to do so having regard to the steps that have been taken to comply in respect of those other securities with the requirements imposed by the exchange for the purpose of complying with paragraph 2(2) (b) of Schedule 4 to this Act, to the nature of the securities to which the offer relates, to the circumstances of their issue and to the information about the issuer which is available to investors by virtue of any enactment.
(4)If it appears to the Secretary of State that the law of a country or territory outside the United Kingdom provides investors in the United Kingdom with protection at least equivalent to that provided by Part IV of this Act or this Part of this Act in respect of securities dealt in on an exchange or exchanges in that country or territory he may by order specify circumstances in which those sections are not to apply to advertisements offering those securities.
(5)An order under subsection (4) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
162Form and content of prospectus
(1)A prospectus shall contain such information and comply with such other requirements as may be prescribed by rules made by the Secretary of State for the purposes of this section.
(2)Rules under this section may make provision whereby compliance with any requirements imposed by or under the law of a country or territory outside the United Kingdom is treated as compliance with any requirements of the rules.
(3)If it appears to the Secretary of State that an approved exchange has rules in respect of prospectuses relating to securities dealt in on the exchange, and practices in exercising any powers conferred by the rules, which provide investors with protection at least equivalent to that provided by rules under this section he may direct that any such prospectus shall be subject to the rules of the exchange instead of the rules made under this section.
163General duty of disclosure in prospectus
(1)In addition to the information required to be included in a prospectus by virtue of rules applying to it by virtue of section 162 above a prospectus shall contain all such information as investors and their professional advisers would reasonably require, and reasonably expect to find there, for the purpose of making an informed assessment of—
(a)the assets and liabilities, financial position, profits and losses, and prospects of the issuer of the securities; and
(b)the rights attaching to those securities.
(2)The information to be included by virtue of this section shall be such information as is mentioned in subsection (1) above which is within the knowledge of any person responsible for the prospectus or which it would be reasonable for him to obtain by making enquiries.
(3)In determining what information is required to be included in a prospectus by virtue of this section regard shall be had—
(a)to the nature of the securities and of the issuer of the securities;
(b)to the nature of the persons likely to consider their acquisition;
(c)to the fact that certain matters may reasonably be expected to be within the knowledge of professional advisers of any kind which those persons may reasonably be expected to consult; and
(d)to any information available to investors or their professional advisers by virtue of any enactment or by virtue of requirements imposed by a recognised investment exchange for the purpose of complying with paragraph 2(2)(b) of Schedule 4 to this Act.
164Supplementary prospectus
(1)Where a prospectus has been registered under this Part of this Act in respect of an offer of securities and at any time while an agreement in respect of those securities can be entered into in pursuance of that offer—
(a)there is a significant change affecting any matter contained in the prospectus whose inclusion was required by rules applying to it by virtue of section 162 above or by section 163 above ; or
(b)a significant new matter arises the inclusion of information in respect of which would have been so required if it had arisen when the prospectus was prepared. the person who delivered the prospectus for registration to the registrar of companies shall deliver to him for registration a supplementary prospectus containing particulars of the change or new matter.
(2)In subsection (1) above " significant " means significant for the purpose of making an informed assessment of the matters mentioned in section 163(1) above.
(3)Where the person who delivered the prospectus for registration is not aware of the change or new matter in question he shall not be under any duty to comply with subsection (1) above unless he is notified of it by a person responsible for the prospectus ; but any person responsible for the prospectus who is aware of such a matter shall be under a duty to give him notice of it.
(4)Subsection (1) above applies also as respects matters contained in a supplementary prospectus previously registered under this section in respect of the securities in question.
165Exemptions from disclosure
(1)If in the case of any approved exchange the Secretary of State so directs, the exchange shall have power to authorise the omission from a prospectus or supplementary prospectus of any information the inclusion of which would otherwise be required by section 163 above—
(a)on the ground that its disclosure would be contrary to the public interest;
(b)subject to subsection (2) below, on the ground that its disclosure would be seriously detrimental to the issuer of the securities; or
(c)in the case of securities which fall within paragraph 2 of Schedule 1 to this Act and are of any class specified by the rules of the exchange, on the ground that its disclosure is unnecessary for persons of the kind who may be expected normally to buy or deal in the securities.
(2)No authority shall be granted under subsection (1)(6) above in respect of, and no such authority shall be regarded as extending to, information the non-disclosure of which would be likely to mislead a person considering the acquisition of the securities as to any facts the knowledge of which it is essential for him to have in order to make an informed assessment.
(3)The Secretary of State or the Treasury may issue a certificate to the effect that the disclosure of any information (including information that would otherwise have to be included in a prospectus or supplementary prospectus for which they are themselves responsible) would be contrary to the public interest and the exchange shall be entitled to act on any such certificate in exercising its powers under subsection (l)(a) above.
166Compensation for false or misleading prospectus
(1)Subject to section 167 below, the person or persons responsible for a prospectus or supplementary prospectus shall be liable to pay compensation to any person who has acquired the securities to which the prospectus relates and suffered loss in respect of them as a result of any untrue or misleading statement in die prospectus or the omission from it of any matter required to be included by section 163 or 164 above.
(2)Where rules applicable to a prospectus by virtue of section 162 above require it to include information as to any particular matter on the basis that the prospectus must include a statement either as to that matter or, if such is the case, that there is no such matter, the omission from the prospectus of the information shall be treated for the purpose of subsection (1) above as a statement that there is no such matter.
(3)Subject to section 167 below, a person who fails to comply with section 164 above shall be liable to pay compensation to any person who has acquired any of the securities in question and suffered loss in respect of them as a result of the failure.
(4)This section does not affect any liability which any person may incur apart from this section.
(5)References in this section to the acquisition by any person of securities include references to his contracting to acquire them or an interest in them.
167Exemption from liability to pay compensation
(1)A person shall not incur any liability under section 166(1) above for any loss in respect of securities caused by any such statement or omission as is there mentioned if he satisfies the court that at the time when the prospectus or supplementary prospectus was delivered for registration he reasonably believed, having made such enquiries (if any) as were reasonable, that the statement was true and not misleading or that the matter whose omission caused the loss was properly omitted and—
(a)that he continued in that belief until the time when the securities were acquired ; or
(b)that they were acquired before it was reasonably practicable to bring a correction to the attention of persons likely to acquire the securities in question ; or
(c)that before the securities were acquired he had taken all such steps as it was reasonable for him to have taken to secure that a correction was brought to the attention of those persons ; or
(d)that the securities were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused; but paragraph (d) above does not apply where the securities are dealt in on an approved exchange unless he satisfies the court that he continued in that belief until after the commencement of dealings in the securities on that exchange.
(2)A person shall not incur any liability under section 166(1) above for any loss in respect of securities caused by a statement purporting to be made by or on the authority of another person as an expert which is, and is stated to be, included in the prospectus or supplementary prospectus with that other person's consent if he satisfies the court that at the time when the prospectus or supplementary prospectus was delivered for registration he believed on reasonable grounds that the other person was competent to make or authorise the statement and had consented to its inclusion in the form and context in which it was included and—
(a)that he continued in that belief until the time when the securities were acquired ; or
(b)that they were acquired before it was reasonably practicable to bring the fact that the expert was not competent or had not consented to the attention of persons likely to acquire the securities in question ; or
(c)that before the securities were acquired he had taken all such steps as it was reasonable for him to have taken to secure that that fact was brought to the attention of those persons ; or
(d)that the securities were acquired after such a lapse of time that he ought in the circumstances to be reasonably excused; but paragraph (d) above does not apply where the securities are dealt in on an approved exchange unless he satisfies the court that he continued in that belief until after the commencement of dealings in the securities on that exchange.
(3)Without prejudice to subsections (1) and (2) above, a person shall not incur any liability under section 166(1) above for any loss in respect of any securities caused by any such statement or omission as is there mentioned if he satisfies the court—
(a)that before the securities were acquired a correction or, where the statement was such as is mentioned in subsection (2) above, the fact that the expert was not competent or had not consented had been published in a manner calculated to bring it to the attention of persons likely to acquire the securities in question; or
(b)that he took all such steps as it was reasonable for him to take to secure such publication and reasonably believed that it had taken place before the securities were acquired.
(4)A person shall not incur any liability under section 166(1) above for any loss resulting from a statement made by an official person or contained in a public official document which is included in the prospectus or supplementary prospectus if he satisfies the court that the statement is accurately and fairly reproduced.
(5)A person shall not incur any liability under section 166(1) or (3) above if he satisfies the court that the person suffering the loss acquired the securities in question with knowledge that the statement was false or misleading, of the omitted matter or of the change or new matter, as the case may be.
(6)A person shall not incur any liability under section 166(3) above if he satisfies the court that he reasonably believed that the change or new matter in question was not such as to call for a supplementary prospectus.
(7)In this section " expert" includes any engineer, valuer, accountant or other person whose profession, qualifications or experience give authority to a statement made by him; and references to the acquisition of securities include references to contracting to acquire them or an interest in them.
168Persons responsible for prospectus
(1)For the purposes of this Part of this Act the persons responsible for a prospectus or supplementary prospectus are—
(a)the issuer of the securities to which the prospectus or supplementary prospectus relates;
(b)where the issuer is a body corporate, each person who is a director of that body at the time when the prospectus or supplementary prospectus is delivered for registration;
(c)where the issuer is a body corporate, each person who has authorised himself to be named, and is named, in the prospectus or supplementary prospectus as a director or as having agreed to become a director of that body either immediately or at a future time ;
(d)each person who accepts, and is stated in the prospectus or supplementary prospectus as accepting, responsibility for, or for any part of, the prospectus or supplementary prospectus;
(e)each person not falling within any of the foregoing paragraphs who has authorised the contents of, or of any part of, the prospectus or supplementary prospectus.
(2)A person is not responsible under subsection (l)(a), (b) or (c) above unless the issuer has made or authorised the offer in relation to which the prospectus or supplementary prospectus was delivered for registration; and a person is not responsible for a prospectus or supplementary prospectus by virtue of subsection (l)(b) above if it is delivered for registration without his knowledge or consent and on becoming aware of its delivery he forthwith gives reasonable public notice that it was delivered without his knowledge or consent.
(3)Where a person has accepted responsibility for, or auth-arised, only part of the contents of any prospectus or supplementary prospectus he is responsible under subsection (l)(d) or (e) above for only that part and only if it is included in (or substantially in) the form and context to which he has agreed.
(4)Where a prospectus or supplementary prospectus relates to securities which are to be issued in connection with an offer by (or by a wholly-owned subsidiary of) the issuer for, or an agreement for the acquisition by (or by a wholly-owned subsidiary of) the issuer of, securities issued by another person or in connection with any arrangement whereby the whole of the undertaking of another person is to become the undertaking of the issuer (of a wholly-owned subsidiary of the issuer or of a body corporate which will become such a subsidiary by virtue of the arrangement) then if—
(a)that other person; and
(b)where that other person is a body corporate, each person who is a director of that body at the time when the prospectus or supplementary prospectus is delivered for registration and each other person who has authorised himself to be named, and is named, in the prospectus or supplementary prospectus as a director of that body, is responsible by virtue of paragraph (d) of subsection (1) above for any part of the prospectus or supplementary prospectus relating to that other person or to the securities or undertaking to which the offer, agreement or arrangement relates, no person shall be responsible for that part under paragraph (a), (b) or (c) of that subsection but without prejudice to his being responsible under paragraph (d).
(5)Neither paragraph (b) nor paragraph (c) of subsection (1) above nor paragraph (b) of subsection (4) above applies in the case of any director if the prospectus or supplementary prospectus is subject to the rules of an approved exchange by virtue of section 162(3) above and he is certified by the exchange as a person to whom that paragraph should not apply by reason of his having an interest, or of any other circumstances, making it inappropriate for him to be responsible by virtue of that paragraph.
(6)In this section " wholly-owned subsidiary ", in relation to a person other than a body corporate, means any body corporate that would be his wholly-owned subsidiary if he were a body corporate.
(7)Nothing in this section shall be construed as making a person responsible for any prospectus or supplementary prospectus by reason only of giving advice as to its contents in a professional capacity.
(8)Where by virtue of this section the issuer of any shares pays or is liable to pay compensation under section 166 above for loss suffered in respect of shares for which a person has subscribed no account shall be taken of that liability or payment in determining any question as to the amount paid on subscription for those shares or as to the amount paid up or deemed to be paid up on them.
169Terms and implementation of offer
(1)The Secretary of State may make rules—
(a)regulating the terms on which a person may offer securities by an advertisement to which this Part of this Act applies; and
(b)otherwise regulating his conduct with a view to ensuring that the persons to whom the offer is addressed are treated equally and fairly.
(2)Rules under this section may, in particular, make provision with respect to the giving of priority as between persons to whom an offer is made and with respect to the payment of commissions.
(3)Section 162(2) above shall apply also to rules made under this section.
170Advertisements by private companies and old public companies
(1)No private company and no old public company shall issue or cause to be issued in the United Kingdom any advertisement offering securities to be issued by that company.
(2)Subsection (1) above shall not apply to an advertisement issued in such circumstances as may be specified by an order made by the Secretary of State for the purpose of exempting from that subsection such advertisements as are mentioned in section 160(6)(a), (b) or (c) above.
(3)An order under subsection (2) above may require any person who by virtue of the order is authorised to issue an advertisement to comply with such requirements as are specified in the order.
(4)An order under subsection (2) above shall be subject to annulment in pursuance of a resolution of either House of Parliament
(5)In this section " old public company " has the meaning given in section 1 of the Companies Consolidation (Consequential Provisions) Act 1985 or the corresponding Northern Ireland provision.
171Contraventions
(1)An authorised person who—
(a)contravenes section 159 or 160 above or rules made under section 169 above ;
(b)contravenes any requirement imposed by an order under section 160(6) or (7) or 170 above ; or
(c)on behalf of a company issues or causes to be issued an advertisement which that company is prohibited from issuing by section 170 above, shall be treated as having contravened rules made under Chapter V of Part I of this Act or, in the case of a person who is an authorised person by virtue of his membership of a recognised self-regulating organisation or certification by a recognised pro fessional body, the rules of that organisation or body.
(2)Section 57 above shall apply to a company which issues or causes to be issued an advertisement in contravention of section 170 above as it applies to a person who issues an advertisement in contravention of that section.
(3)A person, other than an authorised person, who contravenes section 159 or 160, the rules made under section 169 or any requirement imposed by an order under section 160(6) or (7) or 170 above shall be guilty of an offence and liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both;
(b)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
(4)A person who in the ordinary course of a business other than investment business issues an advertisement to the order of another person shall not be guilty of an offence under subsection (3) above in respect of a contravention of section 159 or 160 above if he proves that he believed on reasonable grounds that neither section 159 nor section 160 above applied to the advertisement or that one of those sections had been complied with in respect of the advertisement.
(5)Without prejudice to any liability under section 166 above, a person shall not be regarded as having contravened section 159 or 160 above by reason only of a prospectus not having fully complied with the requirements of this Part of this Act as to its form and content.
(6)Any contravention to which this section applies shall be actionable at the suit of a person who suffers loss as a result of the contravention subject to the defences and other incidents applying to actions for breach of statutory duty.
Part VI
Takeover Offers

172Takeover offers
(1)The provisions set out in Schedule 12 to this Act shall be substituted for sections 428, 429 and 430 of the Companies Act 1985.
(2)Subsection (1) above does not affect any case in which the offer in respect of the scheme or contract mentioned in section 428(1) was made before the coming into force of this section.
Part VII
Insider Dealing

173Information obtained in official capacity: public bodies
(1)In section 2 of the Company Securities (Insider Dealing) Act 1985 (abuse of information obtained by Crown servants in official capacity) for the word " Crown " wherever it occurs there shall be substituted the word
“public”.
(2)At the end of that section there shall be added— " (4) ' Public servant * means— (a) a Crown servant;
(b)a member, officer or servant of a designated agency, competent authority or transferee body (within the meaning of the Financial Services Act 1986);
(c)an officer or servant of a recognised self-regulating organisation, recognised investment exchange or recognised clearing house (within the meaning of that Act);
(d)any person declared by an order for the time being in force under subsection (5) to be a public servant for the purposes of this section.
(5)If it appears to the Secretary of State that the members, officers or employees of or persons otherwise connected with any body appearing to him to exercise public functions may have access to unpublished price sensitive information relating to securities, he may by order declare that those persons are to be public servants for the purposes of this section.
(6)The power to make an order under subsection (5) shall be exercisable by statutory instrument and an instrument containing such an order shall be subject to annulment in pursuance of a resolution of either House of Parliament."
174Market makers, off-market dealers etc.
(1)In subsection (1) of section 3 of the Company Securities (Insider Dealing) Act 1985 (actions not prohibited by sections 1 and 2 of that Act) at the end of paragraph (c) there shall be inserted the words ": or
(d)doing any particular thing in relation to any particular securities if the information—
(i)was obtained by him in the course of a business of a market maker in those securities in which he was engaged or employed, and
(ii)was of a description which it would be reasonable to expect him to obtain in the ordinary course of that business, and he does that thing in good faith in the course of that business.".
(2)At the end of that subsection there shall be inserted— “4 Market maker' means a person (whether an individual, partnership or company) who—
(a)holds himself out at all normal times in compliance with the rules of a recognised stock exchange as willing to buy and sell securities at prices specified by him; and
(b)is recognised as doing so by that recognised stock exchange.”.
(3)The existing provisions of section 4 of that Act (off-market deals in advertised securities) shall become subsection (1) of that section and after that subsection there shall be inserted—
“(2)In its application by virtue of this section the definition of "market maker" in section 3(1) shall have effect as if the references to a recognised stock exchange were references to a recognised investment exchange (other than an overseas investment exchange) within the meaning of the Financial Services Act 1986.”.
(4)In section 13 of that Act
(a)in subsection (1) (which defines dealing in securities and provides that references to dealing on a recognised stock exchange include dealing through an investment exchange) the words from " and references " onwards shall be omitted ; and
(b)for subsection (3) (definition of off-market dealer) there shall be substituted—
“(3)' Off-market dealer' means a person who is an authorised person within the meaning of the Financial Services Act 1986.”.
175Price stabilisation
For section 6 of the Company Securities (Insider Dealing) Act 1985 (international bonds) there shall be substituted— “Price stabilisation.
6(1)No provision of section 1, 2, 4 or 5 prohibits an individual from doing anything for the purpose of stabilising the price of securities if it is done in conformity with rules made under section 48 of the Financial Services Act 1986 and—
(a)in respect of securities which fall within any of paragraphs 1 to 5 of Schedule 1 to that Act and are specified by the rules ; and
(b)during such period before or after the issue of those securities as is specified by the rules.
(2)Any order under subsection (8) of section 48 of that Act shall apply also in relation to subsection (1) of this section.”.
176Contracts for differences by reference to securities
After subsection (1) of section 13 of the Company Securities (Insider Dealing) Act 1985 (definition of dealing in securities), there shall be inserted—
“(1A)For the purposes of this Act a person who (whether as principal or agent) buys or sells or agrees to buy or sell investments within paragraph 9 of Schedule 1 to the Financial Services Act 1986 (contracts for differences etc.) where the purpose or pretended purpose mentioned in that paragraph is to secure a profit or avoid a loss wholly or partly by reference to fluctuations in the value or price of securities shall be treated as if he were dealing in those securities.”.
177Investigations into insider dealing
(1)If it appears to the Secretary of State that there are circumstances suggesting that there may have been a contravention of section 1, 2, 4 or 5 of the Company Securities (Insider Dealing) Act 1985, he may appoint one or more competent inspectors to carry out such investigations as are requisite to establish whether or not any such contravention has occurred and to report the results of their investigations to him.
(2)The appointment under this section of an inspector may limit the period during which he is to continue his investigation or confine it to particular matters.
(3)If the inspectors consider that any person is or may be able to give information concerning any such contravention they may require that person—
(a)to produce to them any documents in his possession or under his control relating to the company in relation to whose securities the contravention is suspected to have occurred or to its securities ;
(b)to attend before them ; and
(c)otherwise to give them all assistance in connection with the investigation which he is reasonably able to give ; and it shall be the duty of that person to comply with that requirement.
(4)An inspector may examine on oath any person who he considers is or may be able to give information concerning any such contravention, and may administer an oath accordingly.
(5)The inspectors shall make such interim reports to the Secretary of State as they think fit or he may direct and on the conclusion of the investigation they shall make a final report to him.
(6)A statement made by a person in compliance with a requirement imposed by virtue of this section may be used in evidence against him.
(7)A person shall not under this section be required to disclose any information or produce any document which he would be entitled to refuse to disclose or produce on grounds of legal professional privilege in proceedings in the High Court or on grounds of confidentiality as between client and professional legal adviser in proceedings in the Court of Session.
(8)Nothing in this section shall require a person carrying on the business of banking to disclose any information or produce any document relating to the affairs of a customer unless—
(a)the customer is a person who the inspectors have reason to believe may be able to give information concerning a suspected contravention ; and
(b)the Secretary of State is satisfied that the disclosure or production is necessary for the purposes of the investigation.
(9)Where a person claims a lien on a document its production under this section shall be without prejudice to his lien.
(10)In this section "document" includes information recorded in any form; and in relation to information recorded otherwise than in legible form references to its production include references to producing a copy of the information in legible form.
178Penalties for failure to co-operate with s. 177 investigations
(1)If any person—
(a)refuses to comply with any request under subsection (3) of section 177 above ; or
(b)refuses to answer any question put to him by the inspectors appointed under that section with respect to any matter relevant for establishing whether or not any suspected contravention has occurred, the inspectors may certify that fact in writing to the court and the court may inquire into the case.
(2)If, after hearing any witness who may be produced against or on behalf of the alleged offender and any statement which may be offered in defence, the court is satisfied that he did without reasonable excuse refuse to comply with such a request or answer any such question, the court may—
(a)punish him in like manner as if he had been guilty of contempt of the court; or
(b)direct that the Secretary of State may exercise his powers under this section in respect of him ; and the court may give a direction under paragraph (b) above notwithstanding that the offender is not within the jurisdiction of the court if the court is satisfied that he was notified of his right to appear before the court and of the powers available under this section.
(3)Where the court gives a direction under subsection (2) (b) above in respect of an authorised person the Secretary of State may serve a notice on him—
(a)cancelling any authorisation of his to carry on investment business after the expiry of a specified period after the service of the notice ;
(b)disqualifying him from becoming authorised to carry on investment business after the expiry of a specified period;
(c)restricting any authorisation of his in respect of investment business during a specified period to the performance of contracts entered into before the notice comes into force;
(d)prohibiting him from entering into transactions of a specified kind or entering into them except in specified circumstances or to a specified extent;
(e)prohibiting him from soliciting business from persons of a specified kind or otherwise than from such persons; or
(f)prohibiting him from carrying on business in a specified manner or otherwise than in a specified manner.
(4)The period mentioned in paragraphs (a) and (c) of subsection (3) above shall be such period as appears to the Secretary of State reasonable to enable the person on whom the notice is served to complete the performance of any contracts entered into before the notice comes into force and to terminate such of them as are of a continuing nature.
(5)Where the court gives a direction under subsection (2)(b) above in the case of an unauthorised person the Secretary of State may direct that any authorised person who knowingly transacts investment business of a specified kind, or in specified circumstances or to a specified extent, with or on behalf of that unauthorised person shall be treated as having contravened rules made under Chapter V of Part I of this Act or, in the case of a person who is an authorised person by virtue of his membership of a recognised self-regulating organisation or certification by a recognised professional body, the rules of that organisation or body.
(6)A person shall not be treated for the purposes of subsection (2) above as having a reasonable excuse for refusing to comply with a request or answer a question in a case where the contravention or suspected contravention being investigated relates to dealing by him on the instructions or for the account of another person, by reason that at the time of the refusal—
(a)he did not know the identity of that other person ; or
(b)he was subject to the law of a country or territory outside the United Kingdom which prohibited him from disclosing information relating to the dealing without the consent of that other person, if he might have obtained that consent or obtained exemption from that law.
(7)A notice served on a person under subsection (3) above may be revoked at any time by the Secretary of State by serving a revocation notice on him; and the Secretary of State shall revoke such a notice if it appears to him that he has agreed to comply with the relevant request or answer the relevant question.
(8)The revocation of such a notice as is mentioned in subsection (3)(a) above shall not have the effect of reviving the authorisation cancelled by the notice except where the person would (apart from the notice) at the time of the revocation be an authorised person by virtue of his membership of a recognised self-regulating organisation or certification by a recognised professional body ; but nothing in this subsection shall be construed as preventing any person who has been subject to such a notice from again becoming authorised after the revocation of the notice.
(9)If it appears to the Secretary of State—
(a)that a person on whom he serves a notice under subsection (3) above is an authorised person by virtue of an authorisation granted by a designated agency or by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body; or
(b)that a person on whom he serves a revocation notice under subsection (7) above was such an authorised person at the time that the notice which is being revoked was served, he shall serve a copy of the notice on that agency, organisation or body.
(10)The functions to which section 114 above applies shall include the functions of the Secretary of State under this section but any transfer of those functions shall be subject to a reservation that they are to be exercisable by him concurrently with the designated agency and so as to be exercisable by the agency subject to such conditions or restrictions as the Secretary of State may from time to time impose.
Part VIII
Restrictions on Disclosure of Information

179Restrictions on disclosure of information
(1)Subject to section 180 below, information which is restricted information for the purposes of this section and relates to the business or other affairs of any person shall not be disclosed by a person mentioned in subsection (3) below (" the primary recipient") or any person obtaining the information directly or indirectly from him without the consent of the person from whom the primary recipient obtained the information and if different, the person to whom it relates.
(2)Subject to subsection (4) below, information is restricted information for the purposees of this section if it was obtained by the primary recipient for the purposes of, or in the discharge of his functions under, this Act or any rules or regulations made under this Act (whether or not by virtue of any requirement to supply it made under those provisions).
(3)The persons mentioned in subsection (1) above are—
(a)the Secretary of State;
(b)any designated agency, transferee body or body administering a scheme under section 54 above ;
(c)the Director General of Fair Trading ;
(d)the Chief Registrar of friendly societies;
(e)the Registrar of Friendly Societies for Northern Ireland ;
(f)the Bank of England ;
(g)any member of the Tribunal;
(h)any person appointed or authorised to exercise any powers under section 94, 106 or 177 above ; and
(i)any officer or servant of any such person.
(4)Information shall not be treated as restricted information for the purposes of this section if it has been made available to the public by virtue of being disclosed in any circumstances in which or for any purpose for which disclosure is not precluded by this section.
(5)Subject to section 180 below, information obtained by the competent authority in the exercise of its functions under Part IV of this Act or received by it pursuant to a Community obligation from any authority exercising corresponding functions in another member State shall not be disclosed without the consent of the person from whom the competent authority obtained the information and, if different, the person to whom it relates.
(6)Any person who contravenes this section shall be guilty of an offence and liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both ;
(b)on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum or to both.
180Exceptions from restrictions on disclosure
(1)Section 179 above shall not preclude the disclosure of information—
(a)with a view to the institution of or otherwise for the purposes of criminal proceedings :
(b)with a view to the institution of or otherwise for the purposes of any civil proceedings arising under or by virtue of this Act or proceedings before the Tribunal;
(c)for the purpose of enabling or assisting the Secretary of State to exercise any powers conferred on him by this Act or by the enactments relating to companies insurance companies or insolvency or for the purpose of enabling or assisting any inspector appointed by him under the enactments relating to companies to discharge his functions;
(d)for the purpose of enabling or assisting the Department of Economic Development for Northern Ireland to exercise any powers conferred on it by the enactments relating to companies or insolvency or for the purpose of enabling or assisting any inspector appointed by it under the enactments relating to companies to discharge his functions;
(e)for the purpose of enabling or assisting a designated agency or transferee body or the competent authority to discharge its functions under this Act or of enabling or assisting the body administering a scheme under section 54 above to discharge its functions under the scheme;
(f)for the purpose of enabling or assisting the Bank of England to discharge its functions under the Banking Act 1979 or any other functions ;
(g)for the purpose of enabling or assisting the Deposit Protection Board to discharge its functions under that Act;
(h)for the purpose of enabling or assisting the Chief Registrar of friendly societies or the Registrar of Friendly Societies for Northern Ireland to discharge his functions under this Act or under the enactments relating to friendly societies or building societies ;
(i)for the purpose of enabling or assisting the Industrial Assurance Commissioner or the Industrial Assurance Commissioner for Northern Ireland to discharge his functions under the enactments relating to industrial assurance;
(j)for the purpose of enabling or assisting the Insurance Brokers Registration Council to discharge its functions under the Insurance Brokers (Registration) Act 1977;
(k)for the purpose of enabling or assisting an official receiver to discharge his functions under the enactments relating to insolvency or for the purpose of enabling or assisting a body which is for the time being a recognised professional body for the purposes of section 391 of the Insolvency Act 1986 to discharge its functions as such;
(l)for the purpose of enabling or assisting the Building Societies Commission to discharge its functions under the Building Societies Act 1986 ;
(m)for the purpose of enabling or assisting the Director General of Fair Trading to discharge his functions under this Act;
(n)for the purpose of enabling or assisting a recognised self-regulating organisation, recognised investment exchange, recognised professional body, or recognised clearing house to discharge its functions as such;
(o)with a view to the institution of, or otherwise for the purposes of, any disciplinary proceedings relating to the exercise by a solicitor, auditor, accountant, valuer or actuary of his professional duties ;
(p)for the purpose of enabling or assisting any person appointed or authorised to exercise any powers under section 94, 106 or 177 above to discharge his functions ;
(q)for the purpose of enabling or assisting an auditor of an authorised person or a person approved under section 108 above to discharge his functions ;
(r)if the information is or has been available to the public from other sources;
(s)in a summary or collection of information framed in such a way as not to enable the identity of any person to whom the information relates to be ascertained; or
(t)in pursuance of any Community obligation.
(2)Section 179 above shall not preclude the disclosure of information to the Secretary of State or to the Treasury if the disclosure is made in the interests of investors or in the public interest.
(3)Subject to subsection (4) below, section 179 above shall not preclude the disclosure of information for the purpose of enabling or assisting any public or other authority for the time being designated for the purposes of this section by an order made by the Secretary of State to discharge any functions which are specified in the order.
(4)An order under subsection (3) above designating an authority for the purposes of that subsection may—
(a)impose conditions subject to which the disclosure of information is permitted by that subsection ; and
(b)otherwise restrict the circumstances in which that subsection permits disclosure.
(5)Section 179 above shall not preclude the disclosure—
(a)of any information contained in an unpublished report of the Tribunal which has been made available to any person under this Act, by the person to whom it was made available or by any person obtaining the information directly or indirectly from him ;
(b)of any information contained in any notice or copy of a notice served under this Act, notice of the contents of which has not been given to the public, by the person on whom it was served or any person obtaining the information directly or indirectly from him;
(c)of any information contained in the register kept under section 102 above by virtue of subsection (1)(e) of that section, by a person who has inspected the register under section 103(2) or (3) above or any person obtaining the information directly or indirectly from him.
(6)Section 179 above shall not preclude the disclosure of information for the purpose of enabling or assisting an authority in a country or territory outside the United Kingdom to exercise functions corresponding to those of the Secretary of State under this Act or the Insurance Companies Act 1982 or to those of the Bank of England under the Banking Act 1979 or to those of the competent authority under this Act or any other functions in connection with rules of law corresponding to the provisions of the Company Securities (Insider Dealing) Act 1985 or Part VII of this Act.
(7)Section 179 above shall not preclude the disclosure of information by the Director General of Fair Trading or any officer or servant of his or any person obtaining the information directly or indirectly from the Director or any such officer or servant if the information was obtained by the Director or any such officer or servant for the purposes of or in the discharge of his functions under this Act (whether or not he was the primary recipient of the information within the meaning of section 179 above) and the disclosure is made—
(a)for the purpose of enabling or assisting the Director, the Secretary of State or any other Minister, the Monopolies and Mergers Commission or any Northern Ireland department to discharge any function conferred on him or them by the Fair Trading Act 1973 (other than Part II or III of that Act), the Restrictive Trade Practices Act 1976 or the Competition Act 1980; or
(b)for the purposes of any civil proceedings under any of those provisions; and information shall not be treated as restricted information for the purposes of section 179 above if it has been made available to the public by virtue of this subsection.
(8)The Secretary of State may by order modify the application of any provision of this section so as—
(a)to prevent the disclosure by virtue of that provision ; or
(b)to restrict the extent to which disclosure is permitted by virtue of that provision, of information received by a person specified in the order pursuant to a Community obligation from a person exercising functions in relation to a collective investment scheme who is also so specified.
(9)An order under subsection (3) or (8) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
181Directions restricting disclosure of information overseas
(1)If it appears to the Secretary of State to be in the public interest to do so, he may give a direction prohibiting the disclosure to any person in a country or territory outside the United Kingdom which is specified in the direction, or to such persons in such a country or territory as may be so specified, of such information to which this section applies as may be so specified.
(2)A direction under subsection (1) above—
(a)may prohibit disclosure of the information to which it applies by all persons or only by such persons or classes of person as may be specified in it; and
(b)may prohibit such disclosure absolutely or in such cases or subject to such conditions as to consent or otherwise as may be specified in it; and a direction prohibiting disclosure by all persons shall be published by the Secretary of State in such manner as appears to him to be appropriate.
(3)This section applies to any information relating to the business or other affairs of any person which was obtained (whether or not by virtue of any requirement to supply it) directly or indirectly—
(a)by a designated agency, a transferee body, the competent authority or any person appointed or authorised to exercise any powers under section 94,106 or 177 above (or any officer or servant of any such body or person) for the purposes or in the discharge of any functions of that body or person under this Act or any rules or regulations made under this Act or of any monitoring agency functions; or
(b)by a recognised self-regulating organisation, a recognised professional body, a recognised investment exchange or a recognised clearing house other than an overseas investment exchange or clearing house (or any officer or servant of such an organisation, body, investment exchange or clearing house) for the purposes or in the discharge of any of its functions as such or of any monitoring agency functions.
(4)In subsection (3) above " monitoring agency functions" means any functions exercisable on behalf of another body by virtue of arrangements made pursuant to paragraph 4(2) of Schedule 2, paragraph 4(6) of Schedule 3, paragraph 3(2) of Schedule 4 or paragraph 3(2) of Schedule 7 to this Act or of such arrangements as are mentioned in section 39(4)(6) above.
(5)A direction under this section shall not prohibit the disclosure by any person other than a person mentioned in subsection (3) above of—
(a)information relating only to the affairs of that person; or
(b)information obtained by that person otherwise than directly or indirectly from a person mentioned in subsection (3) above.
(6)A direction under this section shall not prohibit the disclosure of information in pursuance of any Community obligation.
(7)A person who knowingly discloses information in contravention of a direction under this section shall be guilty of an offence and liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both ;
(b)on summary conviction, to imprisonment for a term not exceeding three months or to a fine not exceeding the statutory maximum or to both.
(8)A person shall not be guilty of an offence under this section by virtue of anything done or omitted to be done by him outside the United Kingdom unless he is a British citizen, a British Dependent Territories citizen, a British Overseas citizen or a body corporate incorporated in the United Kingdom.
182Disclosure of information under enactments relating to fair trading, banking, insurance and companies
The enactments mentioned in Schedule 13 to this Act shall have effect with the amendments there specified (which relate to the circumstances in which information obtained under those enactments may be disclosed).
Part IX
Reciprocity

183Reciprocal facilities for financial business
(1)If it appears to the Secretary of State or the Treasury that by reason of—
(a)the law of any country outside the United Kingdom ; or
(b)any action taken by or the practices of the government or any other authority or body in that country, persons connected with the United Kingdom are unable to carry on investment, insurance or banking business in, or in relation to, that country on terms as favourable as those on which persons connected with that country are able to carry on any such business in, or in relation to, the United Kingdom, the Secretary of State or, as the case may be, the Treasury may serve a notice under this subsection on any person connected with that country who is carrying on or appears to them to intend to carry on any such business in, or in relation to, the United Kingdom.
(2)No notice shall be served under subsection (1) above unless the Secretary of State or, as the case may be, the Treasury consider it in the national interest to serve it; and before doing so the Secretary of State or, as the case may be, the Treasury shall so far as they consider expedient consult such body or bodies as appear to them to represent the interests of persons likely to be affected.
(3)A notice under subsection (1) above shall state the grounds on which it is given (identifying the country in relation to which those grounds are considered to exist); and any such notice shall come into force on such date as may be specified in it.
(4)For the purposes of this section a person is connected with a country if it appears to the Secretary of State or, as the case may be, the Treasury—
(a)in the case of an individual, that he is a national of or resident in that country or carries on investment, insurance or banking business from a principal place of business there;
(b)in the case of a body corporate, that it is incorporated or has a principal place of business in that country or is controlled by a person or persons connected with that country;
(c)in the case of a partnership, that it has a principal place of business in that country or that any partner is connected with that country;
(d)in the case of an unincorporated association which is not a partnership, that it is formed under the law of that country, has a principal place of business there or is controlled by a person or persons connected with that country.
(5)In this section " country " includes any territory or part of a country or territory ; and where it appears to the Secretary of State or, as the case may be, the Treasury that there are such grounds as are mentioned in subsection (1) above in the case of any part of a country or territory their powers under that subsection shall also be exercisable in respect of any person who is connected with that country or territory or any other part of it.
184Investment and insurance business
(1)A notice under section 183 above relating to the carrying on of investment business or insurance business shall be served by the Secretary of State and such a notice may be a disqualification notice, a restriction notice or a partial restriction notice and may relate to the carrying on of business of both kinds.
(2)A disqualification notice as respects investment business or insurance business shall have the effect of—
(a)cancelling any authorisation of the person concerned to carry on that business after the expiry of such period after the service of the notice as may be specified in it;
(b)disqualifying him from becoming authorised to carry on that business after the expiry of that period; and
(c)restricting any authorisation of the person concerned in respect of that business during that period to the performance of contracts entered into before the notice comes into force; and the period specified in such a notice shall be such period as appears to the Secretary of State to be reasonable to enable the person on whom it is served to complete the performance of those contracts and to terminate such of them as are of a continuing nature.
(3)A restriction notice as respects investment business or insurance business shall have the effect of restricting any authorisation of the person concerned in respect of that business to the performance of contracts entered into before the notice comes into force.
(4)A partial restriction notice as respects investment business may prohibit the person concerned from—
(a)entering into transactions of any specified kind or enterering into them except in specified circumstances or to a specified extent;
(b)soliciting business from persons of a specified kind or otherwise than from such persons ;
(c)carrying on business in a specified manner or otherwise than in a specified manner.
(5)A partial restriction notice as respects insurance business may direct that the person concerned shall cease to be authorised under section 3 or 4 of the Insurance Companies Act 1982 to effect contracts of insurance of any description specified in the notice.
(6)If it appears to the Secretary of State that a person on whom he serves a notice under section 183 above as respects investment business is an authorised person by virtue of an authorisation granted by a designated agency or by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body he shall serve a copy of the notice on that agency, organisation or body.
(7)If it appears to the Secretary of State—
(a)that any person on whom a partial restriction notice has been served by him has contravened any provision of that notice or, in the case of a notice under subsection (5) above, effected a contract of insurance of a description specified in the notice; and
(b)that any such grounds as are mentioned in subsection (1) of section 183 above still exist in the case of the country concerned, he may serve a disqualification notice or a restriction notice on him under that section.
(8)Sections 28, 33, 60, 61 and 62 above shall have effect in relation to a contravention of such a notice as is mentioned in subsection (4) above as they have effect in relation to any such contravention as is mentioned in those sections.
185Banking business
(1)A notice under section 183 above relating to the carrying on of a deposit-taking business as a recognised bank or licensed institution within the meaning of the Banking Act 1979 shall be served by the Treasury and may be either a disqualification notice or a partial restriction notice.
(2)A disqualification notice relating to such business shall have the effect of—
(a)cancelling any recognition or licence granted to the person concerned under the Banking Act 1979 ; and
(b)disqualifying him from becoming a recognised bank or licensed institution within the meaning of that Act
(3)A partial restriction notice relating to such business may—
(a)prohibit the person concerned from dealing with or disposing of his assets in any manner specified in the direction;
(b)impose limitations on the acceptance by him of deposits ;
(c)prohibit him from soliciting deposits either generally or from persons who are not already depositors;
(d)prohibit him from entering into any other transaction or class of transactions;
(e)require him to take certain steps, to pursue or refrain from pursuing a particular course of activities or to restrict the scope of his business in a particular way.
(4)The Treasury shall serve on the Bank of England a copy of any notice served by them under section 183 above.
(5)Any person who contravenes any provision of a partial restriction notice served on him by the Treasury under this section shall be guilty of an offence and liable—
(a)on conviction on indictment, to a fine ;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
(6)Any such contravention shall be actionable at the suit of a person who suffers loss as a result of the contravention subject to the defences and other incidents applying to actions for breach of statutory duty, but no such contravention shall invalidate any transaction.
(7)At the end of subsection (1) of section 8 of the Banking Act 1979 (power to give directions in connection with termination of deposit-taking authority) there shall be inserted—
“(d)at any time after a disqualification notice has been served on the institution by the Treasury under section 183 of the Financial Services Act 1986.”.
186Variation and revocation of notices
(1)The Secretary of State or the Treasury may vary a partial restriction notice served under section 183 above by a notice in writing served on the person concerned ; and any such notice shall come into force on such date as is specified in the notice.
(2)A notice under section 183 above may be revoked at any time by the Secretary of State or, as the case may be, the Treasury by serving a revocation notice on the person concerned; and the Secretary of State or, as the case may be, the Treasury shall revoke a notice if it appears to them that there are no longer any such grounds as are mentioned in subsection (1) of that section in the case of the country concerned.
(3)The revocation of a disqualification notice as respects investment business or insurance business shall not have the effect of reviving the authorisation which was cancelled by the notice except where the notice relates to investment business and the person concerned would (apart from the disqualification notice) at the time of the revocation be an authorised person as respects the investment business in question by virtue of his membership of a recognised self-regulating organisation or certification by a recognised professional body.
(4)The revocation of a disqualification notice as respects banking business shall not have the effect of reviving the recognition or licence which was cancelled by the notice.
(5)Nothing in subsection (3) or (4) above shall be construed as preventing any person who has been subject to a disqualification notice as respects any business from again becoming authorised or, as the case may be, becoming a recognised bank or licensed institution within the meaning of the Banking Act 1979 after the revocation of the notice.
(6)If it appears to the Secretary of State that a person on whom he serves a notice under this section as respects investment business was an authorised person by virtue of an authorisation granted by a designated agency or by virtue of membership of a recognised self-regulating organisation or certification by a recognised professional body at the time that the notice which is being varied or revoked was served, he shall serve a copy of the notice on that agency, organisation or body.
(7)The Treasury shall serve on the Bank of England a copy of any notice served by them under this section.
Part X
Miscellaneous and Supplementary

187Exemption from liability for damages
(1)Neither a recognised self-regulating organisation nor any of its officers or servants or members of its governing body shall be liable in damages for anything done or omitted in the discharge or purported discharge of any functions to which this subsection applies unless the act or omission is shown to have been in bad faith.
(2)The functions to which subsection (1) above applies are the functions of the organisation so far as relating to, or to matters arising out of—
(a)the rules, practices, powers and arrangements of the organisation to which the requirements in paragraphs 1 to 6 of Schedule 2 to this Act apply ;
(b)the obligations with which paragraph 7 of that Schedule requires the organisation to comply ;
(c)any guidance issued by the organisation ;
(d)the powers of the organisation under section 53(2), 64(4), 72(5), 73(5) or 105(2)(a) above ; or
(e)the obligations to which the organisation is subject by virtue of this Act.
(3)No designated agency or transferee body nor any member, officer or servant of a designated agency or transferee body shall be liable in damages for anything done or omitted in the discharge or purported discharge of the functions exercisable by the agency by virtue of a delegation order or, as the case may be, the functions exercisable by the body by virtue of a transfer order unless the act or omission is shown to have been in bad faith.
(4)Neither the competent authority nor any member, officer, or servant of that authority shall be liable in damages for anything done or omitted in the discharge or purported discharge of any functions of the authority under Part IV of this Act unless the act or omission is shown to have been in bad faith.
(5)The functions to which subsections (1) and (3) above apply also include any functions exercisable by a recognised self-regulating organisation, designated agency or transferee body on behalf of another body by virtue of arrangements made pursuant to paragraph 4(2) of Schedule 2, paragraph 4(6) of Schedule 3, paragraph 3(2) of Schedule 4 or paragraph 3(2) of Schedule 7 to this Act or of such arrangements as are mentioned in section 39(4)(6) above.
(6)A recognised professional body may make it a condition of any certificate issued by it for the purposes of Part I of this Act that neither the body nor any of its officers or servants or members of its governing body is to be liable in damages for anything done or omitted in the discharge or purported discharge of any functions to which this subsection applies unless the act or omission is shown to have been in bad faith.
(7)The functions to which subsection (6) above applies are the functions of the body so far as relating to, or to matters arising out of—
(a)the rules, practices and arrangements of the body to which the requirements in paragraphs 2 to 5 of Schedule 3 to this Act apply ;
(b)the obligations with which paragraph 6 of that Schedule requires the body to comply ;
(c)any guidance issued by the body in respect of any matters dealt with by such rules as are mentioned in paragraph (a) above;
(d)the powers of the body under the provisions mentioned in subsection (1)(d) above or under section 54(3) above ; or
(e)the obligations to which the body is subject by virtue of this Act.
188Jurisdiction as respects actions concerning designated agency etc.
(1)Proceedings arising out of any act or omission (or proposed act or omission) of a designated agency, transferee body or the competent authority in the discharge or purported discharge of any of its functions under this Act may be brought in the High Court or the Court of Session.
(2)At the end of Schedule 5 to the Civil Jurisdiction and Judgments Act 1982 (exclusion of certain proceedings from the provisions of Schedule 4 to that Act which determine whether the courts in each part of the United Kingdom have jurisdiction in proceedings) there shall be inserted— “Proceedings concerning financial services agencies
10Such proceedings as are mentioned in section 188 of the Financial Services Act 1986.”.
189Restriction of Rehabilitation of Offenders Act 1974
(1)The Rehabilitation of Offenders Act 1974 shall have effect subject to the provisions of this section in cases where the spent conviction is for—
(a)an offence involving fraud or other dishonesty ; or
(b)an offence under legislation (whether or not of the United Kingdom) relating to companies (including insider dealing), building societies, industrial and provident societies, credit unions, friendly societies, insurance, banking or other financial services, insolvency, consumer credit or consumer protection.
(2)Nothing in section 4(1) (restriction on evidence as to spent convictions in proceedings) shall prevent the determination in any proceedings specified in Part I of Schedule 14 to this Act of any issue, or prevent the admission or requirement in any such proceedings of any evidence, relating to a person's previous convictions for any such offence as is mentioned in subsection (1) above or to circumstances ancillary thereto.
(3)A conviction for any such offence as is mentioned in subsection (1) above shall not be regarded as spent for the purposes of section 4(2) (questions relating to an individual's previous convictions) if—
(a)the question is put by or on behalf of a person specified in the first column of Part II of that Schedule and relates to an individual (whether or not the person questioned) specified in relation to the person putting the question in the second column of that Part; and
(b)the person questioned is informed when the question is put that by virtue of this section convictions for any such offence are to be disclosed.
(4)Section 4(3)(b) (spent conviction not to be ground for excluding person from office, occupation etc.) shall not prevent a person specified in the first column of Part III of that Schedule from taking such action as is specified in relation to that person in the second column of that Part by reason, or partly by reason, of a spent conviction for any such offence as is mentioned in subsection (1) above of an individual who is—
(a)the person in respect of whom the action is taken ;
(b)as respects action within paragraph 1 or 4 of that Part, an associate of that person ; or
(c)as respects action within paragraph 1 of that Part consisting of a decision to refuse or revoke an order declaring a collective investment scheme to be an authorised unit trust scheme or a recognised scheme, the operator or trustee of the scheme or an associate of his, or of any circumstances ancillary to such a conviction or of a failure (whether or not by that individual) to disclose such a conviction or any such circumstances.
(5)Parts I, II and III of that Schedule shall have effect subject to Part IV.
(6)In this section and that Schedule " associate " means—
(a)in relation to a body corporate, a director, manager or controller;
(b)in relation to a partnership, a partner or manager;
(c)in relation to a registered friendly society, a trustee, manager or member of the committee of the society;
(d)in relation to an unincorporated association, a member of its governing body or an officer, manager or controller ; *
(e)in relation to an individual, a manager.
(7)This section and that Schedule shall apply to Northern Ireland with the substitution for the references to the said Act of 1974 and section 4(1), (2) and (3)(b) of that Act of references to the Rehabilitation of Offenders (Northern Ireland) Order 1978 and Article 5(1), (2) and (3)(b) of that Order.
190Data protection
An order under section 30 of the Data Protection Act 1984 (exemption from subject access provisions of data held for the purpose of discharging designated functions conferred by or under enactments relating to the regulation of financial services etc.) may designate for the purposes of that section as if they were functions conferred by or under such an enactment as is there mentioned—
(a)any functions of a recognised self-regulating organisation in connection with the admission or expulsion of members, the suspension of a person's membership or the supervision or regulation of persons carrying on investment business by virtue of membership of the organisation;
(b)any functions of a recognised professional body in connection with the issue of certificates for the purposes of Part I of this Act, the withdrawal or suspension of such certificates or the supervision or regulation of persons carrying on investment business by virtue of certification by that body;
(c)any functions of a recognised self-regulating organisation for friendly societies in connection with the supervision or regulation of its member societies.
191Occupational pension schemes
(1)Subject to the provisions of this section, a person who apart from this section would not be regarded as carrying on investment business shall be treated as doing so if he engages in the activity of management falling within paragraph 14 of Schedule 1 to this Act in a case where the assets referred to in that paragraph are held for the purposes of an occupational pension scheme.
(2)Subsection (1) above does not apply where all decisions, or all day to day decisions, in the carrying on of that activity so far as relating to assets which are investments are taken on behalf of the person concerned by—
(a)an authorised person ;
(b)an exempted person who in doing so is acting in the course of the business in respect of which he is exempt ; or
(c)a person who does not require authorisation to manage the assets by virtue of Part IV of Schedule 1 to this Act.
(3)The Secretary of State may by order direct that a person of such description as is specified in the order shall not by virtue of this section be treated as carrying on investment business where the assets are held for the purposes of an occupational pension scheme of such description as is so specified, being a scheme in the case of which it appears to the Secretary of State that management by an authorised or exempted person is unnecessary having regard to the size of the scheme and the control exercisable over its affairs by the members.
(4)An order under subsection (3) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(5)For the purposes of subsection (1) above paragraph 14 of Schedule 1 to this Act shall be construed without reference to paragraph 22 of that Schedule.
192International obligations
(1)If it appears to the Secretary of State—
(a)that any action proposed to be taken by a recognised self-regulating organisation, designated agency, transferee body or competent authority would be incompatible with Community obligations or any other international obligations of the United Kingdom ; or
(b)that any action which that organisation, agency, body or authority has power to take is required for the purpose of implementing any such obligations, he may direct the organisation, agency, body or authority not to take or, as the case may be, to take die action in question.
(2)Subsection (1) above applies also to an approved exchange within the meaning of Part V of this Act in respect of any action which it proposes to take or has power to take in respect of rules applying to a prospectus by virtue of a direction under section 162(3) above.
(3)A direction under this section may include such supplementary or incidental requirements as the Secretary of State thinks necessary or expedient.
(4)Where the function of making or revoking a recognition order in respect of a self-regulating organisation is exercisable by a designated agency any direction under subsection (1) above in respect of that organisation shall be a direction requiring the agency to give the organisation such a direction as is specified in the direction given by the Secretary of State.
(5)Any direction under this section shall, on the application of the person by whom it was given, be enforceable by mandamus or, in Scotland, by an order for specific performance under section 91 of the Court of Session Act 1868.
193Exemption from Banking Act 1979
(1)Section 1(1) of the Banking Act 1979 (control of deposit-taking) shall not apply to the acceptance of a deposit by an authorised or exempted person in the course or for the purpose of engaging in any activity falling within paragraph 12 of Schedule 1 to this Act with or on behalf of the person by whom or on whose behalf the deposit is made or any activity falling within paragraph 13, 14 or 16 of that Schedule on behalf of that person.
(2)Subsection (1) above applies to an exempted person only if the activity is one in respect of which he is exempt; and for the purposes of that subsection the paragraphs of Schedule 1 there mentioned shall be construed without reference to Parts III and IV of that Schedule.
(3)This section is without prejudice to any exemption from the said Act of 1979 which applies to an authorised or exempted person apart from this section.
194Transfers to or from recognised clearing houses
(1)In section 5 of the Stock Exchange (Completion of Bargains) Act 1976 (protection of trustees etc. in case of transfer of shares etc. to or from a stock exchange nominee)—
(a)for the words " a stock exchange nominee ", in the first place where they occur, there shall be substituted the words
“a recognised clearing house or a nominee of a recognised clearing house or of a recognised investment exchange”;
(b)for those words in the second place where they occur there shall be substituted the words
“such a clearing house or nominee”;
(c)at the end there shall be added the words
“; but no person shall be a nominee for the purposes of this section unless he is a person designated for the purposes of this section in the rules of the recognised investment exchange in question”.
(2)The provisions of that section as amended by subsection (1) above shall become subsection (1) of that section and after that subsection there shall be inserted—
“(2)In this section " a recognised clearing house " means a recognised clearing house within the meaning of the Financial Services Act 1986 acting in relation to a recognised investment exchange within the meaning of that Act and " a recognised investment exchange has the same meaning as in that Act.”
(3)In Article 7 of the Stock Exchange (Completion of Bargains) (Northern Ireland) Order 1977 (protection of trustees etc. in case of transfer of shares etc. to or from a stock exchange nominee)—
(a)for the words " a stock exchange nominee ", in the first place where they occur, there shall be substituted the words
“a recognised clearing house or a nominee of a recognised clearing house or of a recognised investment exchange”;
(b)for those words in the second place where they occur there shall be substituted the words
“such a clearing house or nominee”;
(c)at the end there shall be added the words
“; but no person shall be a nominee for the purposes of this Article unless he is a person designated for the purposes of this Article in the rules of the recognised investment exchange in question”.
(4)The provisions of that Article as amended by subsection (3) above shall become paragraph (1) of that Article and after that paragraph there shall be inserted—
“(2)In this Article " a recognised clearing house " means a recognised clearing house within the meaning of the Financial Services Act 1986 acting in relation to a recognised investment exchange within the meaning of that Act and " a recognised investment exchange " has the same meaning as in that Act.”
(5)In subsection (4) of section 185 of the Companies Act 1985 (exemption from duty to issue certificates in respect of shares etc. in cases of allotment or transfer to a stock exchange nominee)—
(a)for the words " a stock exchange nominee " in the first place where they occur there shall be substituted the words
“a recognised clearing house or a nominee of a recognised clearing house or of a recognised investment exchange”;
(b)for those words in the second place where they occur there shall be substituted the words
“such a clearing house or nominee”;
(c)at the end of the first paragraph in that subsection there shall be inserted the words
“; but no person shall be a nominee for the purposes of this section unless he is a person designated for the purposes of this section in the rules of the recognised investment exchange in question”; and
(d)for the second paragraph in that subsection there shall be substituted— “' Recognised clearing house ' means a recognised clearing house within the meaning of the Financial Services Act 1986 acting in relation to a recognised investment exchange and ' recognised investment exchange ' has the same meaning as in that Act.
(6)In paragraph (4) of Article 195 of the Companies (Northern Ireland) Order 1986 (duty to issue certificates in respect of shares etc. in cases of allotment or transfer unless it is to a stock exchange nominee)—
(a)for the words " a stock exchange nominee " in the first place where they occur there shall be substituted the words
“a recognised clearing house or a nominee of a recognised clearing house or of a recognised investment exchange”;
(b)for those words in the second place where they occur there shall be substituted the words
“such a clearing house or nominee”;
(c)at the end of the first sub-paragraph in that paragraph there shall be inserted the words
“; but no person shall be a nominee for the purposes of this Article unless he is a person designated for the purposes of this Article in the rules of the recognised investment exchange in question”; and
(d)for the second sub-paragraph in that paragraph there shall be substituted
“' recognised clearing house ' means a recognised clearing house within the meaning of the Financial Services Act 1986 acting in relation to a recognised investment exchange and ' recognised investment exchange' has the same meaning as in that Act.”.
195Offers of short-dated debentures
As respects debentures which, under the terms of issue, must be repaid within less than one year of the date of issue—
(a)section 79(2) of the Companies Act 1985 (offer of debentures of oversea company deemed not to be an offer to the public if made to professional investor) shall apply for the purposes of Chapter I of Part III of that Act as well as for those of Chapter II of that Part; and
(b)Article 89(2) of the Companies (Northern Ireland) Order 1986 (corresponding provisions for Northern Ireland) shall apply for the purposes of Chapter I of Part IV of that Order as well as for those of Chapter II of that Part.
196Financial assistance for employees' share schemes
(1)Section 153 of the Companies Act 1985 (transactions not prohibited by section 151) shall be amended as follows.
(2)After subsection (4)(b) there shall be inserted—
“(bb)without prejudice to paragraph (b), the provision of financial assistance by a company or any of its subsidiaries for the purposes of or in connection with anything done by the company (or a company connected with it) for the purpose of enabling or facilitating transactions in shares in the first-mentioned company between, and involving the acquisition of beneficial ownership of those shares by, any of the following persons—
(i)the bona fide employees or former employees of that company or of another company in the same group; or
(ii)the wives, husbands, widows, widowers, children or step-children under the age of eighteen of any such employees or former employees.”.
(3)After subsection (4) there shall be inserted—
“(5)For the purposes of subsection (4)(bb) a company is connected with another company if—
(a)they are in the same group ; or
(b)one is entitled, either alone or with any other company in the same group, to exercise or control the exercise of a majority of the voting rights attributable to the share capital which are exercisable in all circumstances at any general meeting of the other company or of its holding company; and in this section " group ", in relation to a company, means that company, any other company which is its holding company or subsidiary and any other company which is a subsidiary of that holding company.”.
(4)Article 163 of the Companies (Northern Ireland) Order 1986 (transactions not prohibited by Article 161) shall be amended as follows.
(5)After paragraph (4)(b) there shall be inserted—
“(bb)without prejudice to sub-paragraph (b), the provision of financial assistance by a company or any of its subsidiaries for the purposes of or in connection with anything done by the company (or a company connected with it) for the purpose of enabling or facilitating transactions in shares in the first-mentioned company between, and involving the acquisition of beneficial ownership of those shares by, any of the following persons—
(i)the bona fide employees or former employees of that company or of another company in the same group; or
(ii)the wives, husbands, widows, widowers, children, step-children or adopted children under the age of eighteen of such employees of former employees.”
(6)After paragraph (4) there shall be inserted— " (5) For the purposes of paragraph (4)(bb) a company is connected with another company if—
(a)they are in the same group; or
(b)one is entitled, either alone or with any other company in the same group, to exercise or control the exercise of a majority of the voting rights attributable to the share capital which are exerciseable in all circumstances at any general meeting of the other company or of its holding company; and in this Article " group ", in relation to a company, means that company, any other company which is its holding company or subsidiary and any other company which is a subsidiary of that holding company.".
197Disclosure of interests in shares: interest held by market maker
(1)In section 209 of the Companies Act 1985 (interests to be disregarded for purposes of sections 198 to 202)—
(a)in subsection (1)(f) after the word "jobber" there shall be inserted the words
“or market maker”;
(b)after subsection (4) there shall be inserted—
“(4A)A person is a market maker for the purposes of subsection (1)(f) if—
(a)he holds himself out at all normal times in compliance with the rules of a recognised investment exchange other than an overseas investment exchange (within the meaning of the Financial Services Act 1986) as willing to buy and sell securities at prices specified by him ; and
(b)is recognised as doing so by that investment exchange; and an interest of such a person in shares is an exempt interest if he carries on business as a market maker in the United Kingdom, is subject to such rules in the carrying on of that business and holds the interest for the purposes of that business.”.
(2)In Article 217 of the Companies (Northern Ireland) Order 1986 (interests to be disregarded for purposes of Articles 206 to 210 (disclosure of interests in shares))—
(a)in paragraph (1)(d) after the word " jobber" there shall be inserted the words
“or market maker”;
(b) after paragraph (4) there shall be inserted—
“(4A)A person is a market maker for the purposes of paragraph (1)(d) if—
(a)he holds himself out at all normal times in compliance with the rules of a recognised investment exchange other than an overseas investment exchange (within the meaning of the Financial Services Act 1986) as willing to buy and sell securities at prices specified by him ; and
(b)is recognised as doing so by that investment exchange, and an interest of such a person in shares is an exempt interest if he carries on business as a market maker in the United Kingdom, is subject to such rules in the carrying on of that business and holds the interest for the purposes of that business.”.
198Power to petition for winding up ect. on information obtained under Act
(1)In section 440 of the Companies Act 1985—
(a)after the words " section 437 " there shall be inserted the words
“above or section 94 of the Financial Services Act 1986”; and
(b)after the words " 448 below " there shall be inserted the words
“or section 105 of that Act”.
(2)In section 8 of the Company Directors Disqualification Act 1986—
(a)after the words " the Companies Act" there shall be inserted the words
“or section 94 or 177 of the Financial Services Act 1986”; and
(b)for the words " that Act" there shall be substituted the words
“the Companies Act or section 105 of the Financial Services Act 1986”.
(3)In Article 433 of the Companies (Northern Ireland) Order 1986—
(a)after the words " Article 430 " there shall be inserted the words
“or section 94 of the Financial Services Act 1986”; and
(b)after the word " 441 " there shall be inserted the words
“or section 105 of that Act”.
199Powers of entry
(1)A justice of the peace may issue a warrant under this section if satisfied on information on oath laid by or on behalf of the Secretary of State that there are reasonable grounds for believing—
(a)that an offence has been committed under section 4, 47, 57, 130, 133 or 171(2) or (3) above or section 1, 2, 4 or 5 of the Company Securities (Insider Dealing) Act 1985 and that there are on any premises documents relevant to the question whether that offence has been committed ; or
(b)that there are on any premises owned or occupied by a person whose affairs, or any aspect of whose affairs, are being investigated under section 105 above documents whose production has been required under that section and which have not been produced in compliance with that requirement; but paragraph (b) above applies only if the person there mentioned is an authorised person, a person whose authorisation has been suspended or who is the subject of a direction under section 33(1)(6) above or an appointed representative of an authorised person.
(2)A justice of the peace may issue a warrant under this section if satisfied on information on oath laid by an inspector appointed under section 94 above that there are reasonable grounds for believing that there are on any premises owned or occupied by—
(a)the manager, trustee or operator of any scheme the affairs of which are being investigated under subsection (1) of that section ; or
(b)a manager, trustee or operator whose affairs are being investigated under that subsection, any documents whose production has been required under that section and which have not been produced in compliance with that requirement.
(3)A warrant under this section shall authorise a constable, together with any other person named in it and any other constables—
(a)to enter the premises specified in the information, using such force as is reasonably necessary for the purpose;
(b)to search the premises and take possession of any documents appearing to be such documents as are mentioned in subsection (1)(a) or (b) or, as the case may be, in subsection (2) above or to take, in relation to any such documents, any other steps which may appear to be necessary for preserving them or preventing interference with them;
(c)to take copies of any such documents ; and
(d)to require any person named in the warrant to provide an explanation of them or to state where they may be found.
(4)A warrant under this section shall continue in force until the end of the period of one month beginning with the day on which it is issued.
(5)Any documents of which possession is taken under this section may be retained—
(a)for a period of three months; or
(b)if within that period proceedings to which the documents are relevant are commenced against any person for an offence under this Act or section 1, 2, 4 or 5 of the said Act of 1985, until the conclusion of those proceedings.
(6)Any person who obstructs the exercise of any rights conferred by a warrant issued under this section or fails without reasonable excuse to comply with any requirement imposed in accordance with subsection (3)(d) above shall be guilty of an offence and liable—
(a)on conviction on indictment, to a fine;
(b)on summary conviction, to a fine not exceeding the statutory maximum.
(7)The functions to which section 114 above applies shall include the functions of the Secretary of State under this section ; but if any of those functions are transferred under that section the transfer may be subject to a reservation that they are to be exercisable by the Secretary of State concurrently with the designated agency and, in the case of functions exercisable by virtue of subsection (l)(a) above, so as to be exercisable by the agency subject to such conditions or restrictions as the Secretary of State may from time to time impose.
(8)In the application of this section to Scotland the references to a justice of the peace shall include references to a sheriff and for references to the laying of information on oath there shall be substituted references to furnishing evidence on oath; and in the application of this section to Northern Ireland for references to the laying of information on oath there shall be substituted references to making a complaint on oath.
(9)In this section " documents" includes information recorded in any form and, in relation to information recorded otherwise than in legible form, references to its production include references to producing a copy of the information in legible form.
200False and misleading statements
(1)A person commits an offence if—
(a)for the purposes of or in connection with any application under this Act; or
(b)in purported compliance with any requirement imposed on him by or under this Act, he furnishes information which he knows to be false or misleading in a material particular or recklessly furnishes information which is false or misleading in a material particular.
(2)A person commits an offence if, not being an authorised person or exempted person, he—
(a)describes himself as such a person ; or
(b)so holds himself out as to indicate or be reasonably understood to indicate that he is such a person
(3)A person commits an offence if, not having a status to which this subsection applies, he—
(a)describes himself as having that status, or
(b)so holds himself out as to indicate; or be reasonably understood to indicate that he has that status.
(4)Subsection (3) above applies to the status of recognised self-regulating organisation, recognised professional body, recognised investment exchange or recognised clearing house.
(5)A person guilty of an offence under subsection (1) above shall be liable—
(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both ;
(b)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or to both.
(6)A person guilty of an offence under subsection (2) or (3) above shall be liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding the fifth level on the standard scale or to both.
(7)Where a contravention of subsection (2) or (3) above involves a public display of the offending description or other matter the maximum fine that may be imposed under subsection (6) above shall be an amount equal to the fifth level on the standard scale multiplied by the number of days for which the display has continued.
(8)In proceedings brought against any person for an offence under subsection (2) or (3) above it shall be a defence for him to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of the offence.
201Prosecutions
(1)Proceedings in respect of an offence under any provision of this Act other than section 133 or 185 shall not be instituted—
(a)in England and Wales, except by or with the consent of the Secretary of State or the Director of Public Prosecutions; or
(b)in Northern Ireland, except by or with the consent of the Secretary of State or the Director of Public Prosecutions for Northern Ireland.
(2)Proceedings in respect of an offence under section 133 above shall not be instituted—
(a)in England and Wales, except by or with the consent of the Secretary of State, the Industrial Assurance Commissioner or the Director of Public Prosecutions; or
(b)in Northern Ireland, except by or with the consent of the Secretary of State or the Director of Public Prosecutions for Northern Ireland.
(3)Proceedings in respect of an offence under section 185 above shall not be instituted—
(a)in England and Wales, except by or with the consent of the Treasury or the Director of Public Prosecutions; or
(b)in Northern Ireland, except by or with the consent of the Treasury or the Director of Public Prosecutions for Northern Ireland.
(4)The functions to which section 114 above applies shall include the function of the Secretary of State under subsection (1) above to institute proceedings but any transfer of that function shall be subject to a reservation that it is to be exercisable by him concurrently with the designated agency and so as to be exercisable by the agency subject to such conditions or restrictions as the Secretary of State may from time to time impose.
202Offences by bodies corporate, partnerships and unincorporated associations
(1)Where an offence under this Act committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of—
(a)any director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity ; or
(b)a controller of the body corporate, he, as well as the body corporate, shall be guilty of that offence and liable to be proceeded against and punished accordingly.
(2)Where the affairs of a body corporate are managed by the members subsection (1) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
(3)Where a partnership is guilty of an offence under this Act every partner, other than a partner who is proved to have been ignorant of or to have attempted to prevent the commission of the offence, shall also be guilty of that offence and be liable to be proceeded against and punished accordingly.
(4)Where an unincorporated association (other than a partnership) is guilty of an offence under this Act—
(a)every officer of the association who is bound to fulfil any duty of which the breach is the offence; or
(b)if there is no such officer, every member of the governing body other than a member who is proved to have been ignorant of or to have attempted to prevent the commission of the offence, shall also be guilty of the offence and be liable to be proceeded against and punished accordingly.
203Jurisdiction and procedure in respect of offences
(1)Summary proceedings for an offence under this Act may, without prejudice to any jurisdiction exercisable apart from this section, be taken against any body corporate or unincorporated association at any place at which it has a place of business and against an individual at any place where he is for the time being.
(2)Proceedings for an offence alleged to have been committed under this Act by an unincorporated association shall be brought in the name of the association (and not in that of any of its members) and for the purposes of any such proceedings any rules of court relating to the service of documents shall have effect as if the association were a corporation.
(3)Section 33 of the Criminal Justice Act 1925 and Schedule 3 to the Magistrates' Courts Act 1980 (procedure on charge of offence against a corporation) shall have effect in a case in which an unincorporated association is charged in England and Wales with an offence under this Act in like manner as they have effect in the case of a corporation.
(4)In relation to any proceedings on indictment in Scotland for an offence alleged to have been committed under this Act by an unincorporated association, section 74 of the Criminal Procedure (Scotland) Act 1975 (proceedings on indictment against bodies corporate) shall have effect as if the association were a body corporate.
(5)Section 18 of the Criminal Justice Act (Northern Ireland) 1945 and Schedule 4 to the Magistrates' Courts (Northern Ireland) Order 1981 (procedure on charge of offence against a corporation) shall have effect in a case in which an unincorporated association is charged in Northern Ireland with an offence under this Act in like manner as they have effect in the case of a corporation.
(6)A fine imposed on an unincorporated association on its conviction of an offence under this Act shall be paid out of the funds of the association.
204Service of notices
(1)This section has effect in relation to any notice, direction or other document required or authorised by or under this Act to be given to or served on any person other than the Secretary of State, the Chief Registrar of friendly societies or the Registrar of Friendly Societies for Northern Ireland.
(2)Any such document may be given to or served on the person in question—
(a)by delivering it to him ;
(b)by leaving it at his proper address ; or
(c)by sending it by post to him at that address.
(3)Any such document may—
(a)in the case of a body corporate, be given to or served on the secretary or clerk of that body ;
(b)in the case of a partnership, be given to or served on any partner;
(c)in the case of an unincorporated association other than a partnership, be given to or served on any member of the governing body of the association ;
(d)in the case of an appointed representative, be given to or served on his principal.
(4)For the purposes of this section and section 7 of the Interpretation Act 1978 (service of documents by post) in its application to this section, the proper address of any person is his last known address (whether of his residence or of a place where he carries on business or is employed) and also any address applicable in his case under the following provisions—
(a)in the case of a member of a recognised self-regulating organisation or a person certified by a recognised professional body who does not have a place of business in the United Kingdom, the address of that organisation or body;
(b)in the case of a body corporate, its secretary or its clerk, the address of its registered or principal office in the United Kingdom ;
(c)in the case of an unincorporated association (other than a partnership) or a member of its governing body, its principal office in the United Kingdom.
(5)Where a person has notified the Secretary of State of an address or a new address at which documents may be given to or served on him under this Act that address shall also be his proper address for the purposes mentioned in subsection (4) above or, as the case may be, his proper address for those purposes in substitution for that previously notified.
205Regulations, rules and orders
(1)The Secretary of State may make regulations prescribing anything which by this Act is authorised or required to be prescribed.
(2)Subject to subsection (5) below, any power of the Secretary of State to make regulations, rules or orders under this Act shall be exercisable by statutory instrument.
(3)Subject to subsection (5) below, any regulations, rules or orders made under this Act by the Secretary of State may make different provision for different cases.
(4)Except as otherwise provided, a statutory instrument containing regulations or rules under this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(5)Subsections (2) and (3) above do not apply to a recognition order, an order declaring a collective investment scheme to be an authorised unit trust scheme or a recognised scheme or to an order revoking any such order.
206Publication of information and advice
(1)The Secretary of State may publish information or give advice, or arrange for the publication of information or the giving of advice, in such form and manner as he considers appropriate with respect to—
(a)the operation of this Act and the rules and regulations made under it, including in particular the rights of investors, the duties of authorised persons and the steps to be taken for enforcing those rights or complying with those duties;
(b)any matters relating to the functions of the Secretary of State under this Act or any such rules or regulations ;
(c)any other matters about which it appears to him to be desirable to publish information or give advice for the protection of investors or any class of investors.
(2)The Secretary of State may offer for sale copies of information published under this section and may, if he thinks fit, make a reasonable charge for advice given under this section at any person's request.
(3)This section shall not be construed as authorising the disclosure of restricted information within the meaning of section 179 above in any case in which it could not be disclosed apart from the provisions of this section.
(4)The functions to which section 114 above applies shall include the functions of the Secretary of State under this section.
207Interpretation
(1)In this Act, except where the context otherwise requires—
" appointed representative " has the meaning given in section 44 above;
" authorised person" means a person authorised under Chapter III of Part I of this Act;
" authorised unit trust scheme " means a unit trust scheme declared by an order of the Secretary of State for the time being in force to be an authorised unit trust scheme for the purposes of this Act;
" body corporate " includes a body corporate constituted under the law of a country or territory outside the United Kingdom;
" certified " and " certification " mean certified or certification by a recognised professional body for the purposes of Part I of this Act;
" clearing arrangements " has the meaning given in section 38(2) above;
" competent authority " means the competent authority for the purposes of Part IV of this Act; "collective investment scheme" has the meaning given in section 75 above;
" delegation order " and " designated agency " have the meaning given in section 114(3) above ;
" director", in relation to a body corporate, includes a person occupying in relation to it the position of a director (by whatever name called) and any person in accordance with whose directions or instructions (not being advice given in a professional capacity) the directors of that body are accustomed to act;
" exempted person " means a person exempted under Chapter IV of Part I of this Act;
" group ", in relation to a body corporate, means that body corporate, any other body corporate which is its holding company or subsidiary and any other body corporate which is a subsidiary of that holding company;
" guidance ", in relation to a self-regulating organisation, professional body, investment exchange, clearing house or designated agency, has the meaning given in section 8(4), 16(4), 36(3), 38(3) or 114(12) above ;
" investment advertisement" has the meaning given in section 57(2) above;
" investment agreement" has the meaning given in section 44(9) above;
" listing particulars" has the meaning given in section 144(2) above;
" member ", in relation to a self-regulating organisation or professional body, has the meaning given in section 8(2) or 16(2) above ;
" occupational pension scheme" means any scheme or arrangement which is comprised in one or more instruments or agreements and which has, or is capable of having, effect in relation to one or more descriptions or categories of employment so as to provide benefits, in the form of pensions or otherwise, payable on termination of service, or on death or retirement, to or in respect of earners with qualifying service in an employment of any such description or category;
" operator ", in relation to a collective investment scheme, shall be construed in accordance with section 75(8) above;
" open-ended investment company " has the meaning given in section 75(8) above ;
" overseas investment exchange " and " overseas clearing house" mean a recognised investment exchange or recognised clearing house in the case of which the recognition order was made by virtue of section 40 above;
" participant" has the meaning given in section 75(2) above;
" partnership" includes a partnership constituted under the law of a country or territory outside the United Kingdom;
" prescribed " means prescribed by regulations made by the Secretary of State;
" principal", in relation to an appointed representative, has the meaning given in section 44 above ;
" private company " has the meaning given in section 1(3) of the Companies Act 1985 or the corresponding Northern Ireland provision;
" recognised clearing house " means a body declared by an order of the Secretary of State for the time being in force to be a recognised clearing house for the purposes of this Act;
" recognised investment exchange " means a body declared by an order of the Secretary of State for the time being in force to be a recognised investment exchange for the purposes of this Act;
" recognised professional body " means a body declared by an order of the Secretary of State for the time being in force to be a recognised professional body for the purposes of this Act;
" recognised scheme " means a scheme recognised under section 86, 87 or 88 above ;
" recognised self-regulating organisation" means a body declared by an order of the Secretary of State for the time being in force to be a recognised self-regulating organisation for the purposes of this Act;
" recognised self-regulating organisation for friendly societies " has the meaning given in paragraph 1 of Schedule 11 to this Act;
" recognition order " means an order declaring a body to be a recognised self-regulating organisation, self-regulating organisation for friendly societies, professional body, investment exchange or clearing house ;
" registered friendly society " means—
(a)a society which is a friendly society within the meaning of section 7(l)(o) of the Friendly Societies Act 1974 and is registered within the meaning of that Act; or
(b)a society which is a friendly society within the meaning of section 1(1 ) of the Friendly Societies Act (Northern Ireland) 1970 and is registered or deemed to be registered under that Act;
" rules ", in relation to a self-regulating organisation, professional body, investment exchange or clearing house, has the meaning given in section 8(3), 16(3), 36(2) or 38(2) above;
" transfer order " and " transferee body " have the meaning given in paragraph 28(4) of Schedule 11 to this Act;
" the Tribunal " means the Financial Services Tribunal;
" trustee ", in relation to a collective investment scheme, has the meaning given in section 75(8) above ;
" unit trust scheme " and " units " have the meaning given in section 75(8) above.
(2)In this Act " advertisement" includes every form of advertising, whether in a publication, by the display of notices, signs, labels or showcards, by means of circulars, catalogues, price lists or other documents, by an exhibition of pictures or photographic or cinematographic films, by way of sound broadcasting or television, by the distribution of recordings, or in any other manner; and references to the issue of an advertisement shall be construed accordingly.
(3)For the purposes of this Act an advertisement or other information issued outside the United Kingdom shall be treated as issued in the United Kingdom if it is directed to persons in the United Kingdom or is made available to them otherwise than in a newspaper, journal, magazine or other periodical publication published and circulating principally outside the United Kingdom or in a sound or television broadcast transmitted principally for reception outside the United Kingdom.
(4)The Independent Broadcasting Authority shall not be regarded as contravening any provision of this Act by reason of broadcasting an advertisement in accordance with the provisions of the Broadcasting Act 1981.
(5)In this Act " controller " means—
(a)in relation to a body corporate, a person who, either alone or with any associate or associates, is entitled to exercise, or control the exercise of, 15 per cent, or more of the voting power at any general meeting of the body corporate or another body corporate of which it is a subsidiary ; and
(b)in relation to an unincorporated association—
(i)any person in accordance with whose directions or instructions, either alone or with those of any associate or associates, the officers or members of the governing body of the association are accustomed to act (but disregarding advice given in a professional capacity); and
(ii)any person who, either alone or with any associate or associates, is entitled to exercise, or control the exercise of, 15 per cent, or more of the voting power at any general meeting of the association ;and for the purposes of this subsection " associate ", in relation to any person, means that person's wife, husband or minor child or step-child, any body corporate of which that person is a director, any person who is an employee or partner of that person and, if that person is a body corporate, any subsidiary of that body corporate and any employee of any such subsidiary.
(6)In this Act, except in relation to a unit trust scheme or a registered friendly society, " manager" means an employee who—
(a)under the immediate authority of his employer is responsible, either alone or jointly with one or more other persons, for the conduct of his employer's business ; or
(b)under the immediate authority of his employer or of a person who is a manager by virtue of paragraph (a) above exercises managerial functions or is responsible for maintaining accounts or other records of his employer ; and, where the employer is not an individual, references in this subsection to the authority of the employer are references to the authority, in the case of a body corporate, of the directors, in the case of a partnership, of the partners and, in the case of an unincorporated association, of its officers or the members of its governing body.
(7)In this Act " insurance business ", insurance company " and " contract of insurance " have the same meanings as in the Insurance Companies Act 1982.
(8)Section 736 of the Companies Act 1985 (meaning of subsidiary and holding company) shall apply for the purposes of this Act.
(9)In the application of this Act to Scotland, references to a matter being actionable at the suit of a person shall be construed as references to the matter being actionable at the instance of that person.
(10)For the purposes of any provision of this Act authorising or requiring a person to do anything within a specified number of days no account shall be taken of any day which is a public holiday in any part of the United Kingdom.
(11)Nothing in Part I of this Act shall be construed as applying to investment business carried on by any person when acting as agent or otherwise on behalf of the Crown.
208Gibraltar
(1)Subject to the provisions of this section, section 31, 58(l)(c), 86 and 130(2)(c) and (d) above shall apply as if Gibraltar were a member State.
(2)References in those provisions to a national of a member State shall, in relation to Gibraltar, be construed as references to a British Dependent Territories citizen or a body incorporated in Gibraltar.
(3)In the case of a collective investment scheme constituted in Gibraltar the reference in subsection (3)(a) of section 86 above to a relevant Community instrument shall be taken as a reference to any Community instrument the object of which is the co-ordination or approximation of the laws, regulations or administrative provisions of member States relating to collective investment schemes of a kind which satisfy the requirements pie-scribed for the purposes of that section.
(4)The Secretary of State may by regulations make such provision as appears to him to be necessary or expedient to secure—
(a)that he may give notice under subsection (2) of section 86 above on grounds relating to the law of Gibraltar ; and
(b)that this Act applies as if a scheme which is constituted in a member State other than the United Kingdom and recognised in Gibraltar under provisions which appear to the Secretary of State to give effect to the provisions of a relevant Community instrument were a scheme recognised under that section.
209Northern Ireland
(1)This Act extends to Northern Ireland.
(2)Subject to any Order made after the passing of this Act by virtue of subsection (1)(a) of section 3 of the Northern Ireland Constitution Act 1973 the regulation of investment business, the official listing of securities and offers of unlisted securities shall not be transferred matters for the purposes of that Act but shall for the purposes of subsection (2) of that section be treated as specified in Schedule 3 to that Act.
210Expenses and receipts
(1)Any expenses incurred by the Secretary of State under this Act shall be defrayed out of moneys provided by Parliament.
(2)Any fees or other sums received by the Secretary of State under this Act shall be paid into the Consolidated Fund.
(3)Subsections (1) and (2) above apply also to expenses incurred and fees received under this Act by the Chief Registrar of friendly societies; and any fees received under this Act by the Registrar of Friendly Societies for Northern Ireland shall be paid into the Consolidated Fund of Northern Ireland.
211Commencement and transitional provisions
(1)This Act shall come into force on such day as the Secretary of State may by order appoint and different days may be appointed for different provisions or different purposes.
(2)Subsection (1) above does not apply to section 195 which shall come into force when this Act is passed.
(3)Schedule IS to this Act shall have effect with respect to the transitional matters there mentioned.
212Short title, consequential amendments and repeals
(1)This Act may be cited as the Financial Services Act 1986.
(2)The enactments and instruments mentioned in Schedule 16 to this Act shall have effect with the amendments there specified, being amendments consequential on the provisions of this Act.
(3)The enactments mentioned in Part I of Schedule 17 to this Act and the instruments mentioned in Part II of that Schedule are hereby repealed or revoked to the extent specified in the third column of those Parts.

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1Extended meaning of " the Treaties " and " the Community Treaties ".
In section 1(2) of the European Communities Act 1972, in the definition of" the Treaties " and " the Community Treaties ", after paragraph (h) (inserted by the European Communities (Spanish and Portuguese Accession) Act 1985) there shall be inserted the words
“and
(j) the following provisions of the Single European Act signed at Luxembourg and The Hague on 17th and 28th February 1986, namely Title II (amendment of the treaties establishing the Communities) and, so far as they relate to any of the Communities or any Community institution, the preamble and Titles I (common provisions) and IV (general and final provisions);”
2Extension of provisions to courts attached to European Court.
In the European Communities Act 1972—
(a)in section 3(1) (which requires certain questions, if not referred to the European Court, to be determined in accordance with the principles laid down by and any relevant decision of the European Court), for " decision of the European Court) " there shall be substituted
“decision of the European Court or any court attached thereto)”; and
(b)in sections 3(2) and (3) and 11(1) (which, as regards the European Court, provide for judicial notice to be taken of its pronouncements, for proof of its judgments and orders, and for the trial and punishment of persons who in sworn evidence before it make statements which they know to be false or do not believe to be true), after " the European Court", wherever occurring, there shall be inserted
“or any court attached thereto”
3Provisions relating to European Assembly.
(1)Subject to subsection (2) below and to the repeals and revocations made by section 4(3) below, any enactment or instrument passed or made before the day on which the Single European Act enters into force shall have effect on and after that day with the substitution—
(a)of a reference to the (or, as the case may be, a) European Parliament for any reference (however worded) to the (or an) Assembly of the European Communities; and
(b)of the words " European Parliamentary " for the word " Assembly " and for the words " European Assembly " wherever that word or those words are used adjectivally with reference to the European Assembly (together with, where necessary, the consequential substitution of
“a”for " an ")
(2)The provisions on which subsection (1) above operates do not include that subsection itself or subsection (3) below or the long title of this Act but, subject to those exceptions, include—
(a)the long titles of Acts passed before the day mentioned in subsection (1) above;
(b)any provision of an Act or instrument passed or made before that day specifying how that Act or instrument may be cited; and
(c)so much of any Act or instrument so passed or made as uses a mode of citation authorised by another such Act or instrument to refer to that other Act or instrument.
(3)On and after the day mentioned in subsection (1) above the enactments and instruments amended by this section shall have effect as if the Assembly of the European Communities ha always been named the European Parliament.
(4)For the purpose of section 6 of the European Assembly Elections Act 1978 the Single European Act is hereby approved
4Short title, interpretation and repeals.
(1)This Act may be cited as the European Communities (Amendment) Act 1986.
(2)In this Act " the Single European Act" means the Single European Act signed at Luxembourg and The Hague on 17th and 28th February 1986.
(3)The enactments and instruments mentioned in the Schedule to this Act are hereby repealed or revoked to the extent specified in the third column of that Schedule as from the day mentioned in section 3(1) above.

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1Public Trustee and Accountant General: appointment, tenure of office etc.
(1)The office of Public Trustee and the office of Accountant General of the Supreme Court may be held by one person.
(2)The office of Accountant General of the Supreme Court may, but need not, be held by the Permanent Secretary to the Lord Chancellor.
(3)The enactments specified in the Schedule to this Act shall have effect with the amendments specified in that Schedule.
2Exercise by Public Trustee of functions of Court of Protection
(1)Part VII of the Mental Health Act 1983 (which provides for the protection and management of the property and affairs of mental patients) shall have effect with the following amendments.
(2)In section 94 (exercise of judge's functions)—
(a)in subsection (1), at the beginning there shall be inserted the words
“Subject to subsection (1A) below”
and after the words " Master of the Court of Protection " there shall be inserted the words
“, by the Public Trustee”;
(b)in subsection (1), there shall be inserted, in paragraph (a),after the word " Master" the words ", the Public Trustee" and, after that paragraph, the following paragraph—
" (aa) in the case of the Public Trustee, subject to any directions of the Master and so far only as may be provided by any rules made under this Part of this Act or (subject to any such rules) by directions of the Master,"; and
(c)after subsection (1) there shall be inserted the following subsection—" (1A) In such cases or circumstances as may be prescribed by any rules under this Part of this Act or (subject to any such rules) by directions of the Master, the functions of the judge under this Part of this Act shall be exercised by the Public Trustee (but subject to any directions of the Master as to their exercise) ".
(3)In section 111 (exercisability of functions conferred by other Acts)—
(a)in subsection (2), after the words " subsection (3) " there shall be inserted the words
“and (3A)”
and after the words " Master of the Court of Protection " there shall be inserted the words
“, by the Public Trustee”;
(b)after subsection (2) there shall be inserted the following subsection—
“(2A)The exercise of the functions referred to in subsection (2) above by the Public Trustee shall be subject to any directions of the Master and they shall be exercisable so far only as may be provided by any rules made under this Part of this Act or (subject to any such rules) by directions of the Master.”; and
(c)after subsection (3) there shall be inserted the following subsection—
“(3A)In such cases or circumstances as may be prescribed by any rules under this Part of this Act or (subject to any such rules) by directions of the Master, the functions referred to in subsection (2) above shall be exercised by the Public Trustee (but subject to any directions of the Master as to their exercise).”
3Functions of the Public Trustee
(1)The Public Trustee shall have, in addition to his powers and duties under the Public Trustee Act 1906 (" the 1906 Act"), the following functions.
(2)Subject to subsections (4), (5) and (6) below, the Public Trustee shall have all the functions expressed to be conferred by Part VII of the Mental Health Act 1983 (" the 1983 Act") on the judge with respect to the property and affairs of a patient and, notwithstanding anything in the 1906 Act, if authorised, appointed or directed (as the case may be) to do so, he may—
(a)act as, as well as appoint a person to act as, a receiver for a patient, or
(b)carry on, as well as authorise or direct a suitable person to carry on, a patient's profession, trade or business.
(3)Subject to subsections (4), (5) and (6) below, the Public Trustee shall have all the functions expressed to be conferred by any enactment not contained in Part VII of the 1983 Act on the authority having jurisdiction under that Part of that Act.
(4)The Public Trustee shall not exercise the functions conferred on him by subsection (2) or (3) above except where those functions are made exercisable or are to be exercised by him by virtue of rules made or directions given to him under Part VII of the 1983 Act.
(5)Where, under any such rules or directions, functions become exercisable or are to be exercised by the Public Trustee he shall discharge the duties and may exercise the powers so imposed or conferred on him (and, where directions are given by the Master, in accordance with the directions) whether or not, under any provision of the 1906 Act, he would be obliged or empowered to decline to accept any trust or other duty.
(6)The discharge by the Public Trustee of any functions under this section shall not be treated as the discharge of the duties of his office for the purposes of the following provisions of the 1906 Act, that is to say—
(a)section 7 (liability of Consolidated Fund);
(b)section 9 (fees); and
(c)section 10 (appeal to court);but persons may be appointed as his officers and expenses paid under section 8 and rules may be made under section 14 of that Act for the purposes of this section as for the purposes of that Act.
(7)In this section " the judge " and " patient " have the same meaning as in Part VII of the 1983 Act and " the Master " means the Master of the Court of Protection.
4Accountant General's powers of investment
In section 38 of the Administration of Justice Act 1982 (management and investment of funds in court), subsection (5) (power of court to specify manner of investment by Accountant General) and, in subsection (4), the words " subject to subsection (5) below " shall be omitted.
Investment expenses of National Debt Commissioners

5Deduction by National Debt Commissioners of investment expenses of money in court
(1)In section 39 of the Administration of Justice Act 1982 (investment of money in court transferred to National Debt Commissioners) in subsection (2) (payment of excess into Consolidated Fund) after paragraph (b) there shall be inserted the words— " and
(c)an amount equal to the expenses incurred by the Commissioners in that year in making investments under subsection (1) above and disposing of investments so made ".
(2)In subsection (3) of that section (deficiencies to be made good out of the Consolidated Fund) for the words " paragraphs (a) and (b)" there shall be substituted the words
“paragraphs (a) to (c)”.
(3)After subsection (4) of that section there shall be inserted the following subsection—
“(4A)Any sum deducted by the Commissioners under subsection (2)(c) above shall be applied as an appropriation in aid of moneys provided by Parliament for the expenses of the National Debt Commissioners; and, so far as not so applied, shall be paid into the Consolidated Fund.”
General

6Short title, commencement and extent
(1)This Act may be cited as the Public Trustee and Administration of Funds Act 1986.
(2)This Act shall come into force on such day as the Lord Chancellor appoints by order made by statutory instrument.
(3)With the exception of the amendments in the Administration of Justice Act 1982, this Act extends to England and Wales only.

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1Parliamentary constituencies
(1)There shall for the purpose of parliamentary elections be the county and borough constituencies (or in Scotland the county and burgh constituencies), each returning a single member, which are described in Orders in Council made under this Act.
(2)In this Act and, except where the context otherwise requires, in any Act passed after the Representation of the People Act 1948, " constituency " means an area having separate representation in the House of Commons.
2The Boundary Commissions
(1)For the purpose of the continuous review of the distribution of seats at parliamentary elections, there shall continue to be four permanent Boundary Commissions, namely a Boundary Commission for England, a Boundary Commission for Scotland, a Boundary Commission for Wales and a Boundary Commission for Northern Ireland.
(2)Schedule 1 to this Act shall have effect with respect to the constitution of, and other matters relating to, the Boundary Commissions.
3Reports of the Commissions
(1)Each Boundary Commission shall keep under review the representation in the House of Commons of the part of the United Kingdom with which they are concerned and shall, in accordance with subsection (2) below, submit to the Secretary of State reports with respect to the whole of that part of the United Kingdom, either—
(a)showing the constituencies into which they recommend that it should be divided in order to give effect to the rules set out in paragraphs 1 to 6 of Schedule 2 to this Act (read with paragraph 7 of that Schedule), or
(b)stating that, in the opinion of the Commission, no alteration is required to be made in respect of that part of the United Kingdom in order to give effect to the said rules (read with paragraph 7).
(2)Reports under subsection (1) above shall be submitted by a Boundary Commission not less than ten or more than fifteen years from the date of the submission of their last report under that subsection.
(3)Any Boundary Commission may also from time to time submit to the Secretary of State reports with respect to the area comprised in any particular constituency or constituencies in the part of the United Kingdom with which they are concerned, showing the constituencies into which they recommend that that area should be divided in order to give effect to the rules set out in paragraphs 1 to 6 of Schedule 2 to this Act (read with paragraph 7 of that Schedule).
(4)A report of a Boundary Commission under this Act showing the constituencies into which they recommend that any area should be divided shall state, as respects each constituency, the name by which they recommend that it should be known, and whether they recommend that it should be a county constituency or a borough constituency (or in Scotland a county constituency or a burgh constituency).
(5)As soon as may be after a Boundary Commission have submitted a report to the Secretary of State under this Act, he shall lay the report before Parliament together, except in a case where the report states that no alteration is required to be made in respect of the part of the United Kingdom with which the Commission are concerned, with the draft of an Order in Council for giving effect, whether with or without modifications, to the recommendations contained in the report.
(6)Schedule 2 to this Act which contains the rules referred to above and related provisions shall have effect.
4Orders in Council
(1)The draft of any Order in Council laid before Parliament by the Secretary of State under this Act for giving effect, whether with or without modifications, to the recommendations contained in the report of a Boundary Commission may make, provision for any matters which appear to him to be incidental to, or consequential on, the recommendations.
(2)Where any such draft gives effect to any such recommendations with modifications, the Secretary of State shall lay before Parliament together with the draft a statement of the reasons for the modifications.
(3)If any such draft is approved by resolution of each House of Parliament, the Secretary of State shall submit it to Her Majesty in Council.
(4)If a motion for the approval of any such draft is rejected by either House of Parliament or withdrawn by leave of the House, the Secretary of State may amend the draft and lay the amended draft before Parliament, and if the draft as so amended is approved by resolution of each House of Parliament, the Secretary of State shall submit it to Her Majesty in Council.
(5)Where the draft of an Order in Council is submitted to Her Majesty in Council under this Act, Her Majesty in Council may make an Order in terms of the draft which (subject to subsection (6) below) shall come into force on such date as may be specified in the Order and shall have effect notwithstanding anything in any enactment.
(6)The coming into force of any such Order shall not affect any parliamentary election until a proclamation is issued by Her Majesty summoning a new Parliament, or affect the constitution of the House of Commons until the dissolution of the Parliament then in being.
(7)The validity of any Order in Council purporting to be made under this Act and reciting that a draft of the Order has been approved by resolution of each House of Parliament shall not be called in question in any legal proceedings whatsoever.
5Notices
(1)Where a Boundary Commission intend to consider making a report under this Act they shall, by notice in writing, inform the Secretary of State accordingly, and a copy of the notice shall be published—
(a)in a case where it was given by the Boundary Commission for England or the Boundary Commission for Wales, in the London Gazette,
(b)in a case where it was given by the Boundary Commission for Scotland, in the Edinburgh Gazette, and
(c)in a case where it was given by the Boundary Commission for Northern Ireland, in the Belfast Gazette.
(2)Where a Boundary Commission have provisionally determined to make recommendations affecting any constituency, they shall publish in at least one newspaper circulating in the constituency a notice stating—
(a)the effect of the proposed recommendations and (except in a case where they propose to recommend that no alteration be made in respect of the constituency) that a copy of the recommendations is open to inspection at a specified place within the constituency, and
(b)that representations with respect to the proposed recommendations may be made to the Commission within one month after the publication of the notice ;and the Commission shall take into consideration any representations duly made in accordance with any such notice.
(3)Where a Boundary Commission revise any proposed recommendations after publishing a notice of them under subsection (2) above, the Commission shall comply again with that subsection in relation to the revised recommendations, as if no earlier notice had been published.
6Local inquiries
(1)A Boundary Commission may, if they think fit, cause a local inquiry to be held in respect of any constituency or constituencies.
(2)Where, on the publication of the notice under section 5(2) above of a recommendation of a Boundary Commission for the alteration of any constituencies, the Commission receive any representation objecting to the proposed recommendation from an interested authority or from a body of electors numbering one hundred or more, the Commission shall not make the recommendation unless, since the publication of the notice, a local inquiry has been held in respect of the constituencies.
(3)Where a local inquiry was held in respect of the constituencies before the publication of the notice mentioned in subsection (2) above, that subsection shall not apply if the Commission, after considering the matters discussed at the local inquiry, the nature of the representations received on the publication of the notice and any other relevant circumstances, are of opinion that a further local inquiry would not be justified.
(4)In subsection (2) above, "interested authority" and "elector" respectively mean, in relation to any recommendation, a local authority whose area is wholly or partly comprised in the constituencies affected by the recommendation, and a parliamentary elector for any of those constituencies; and for this purpose " local authority " means—
(a)in England and Wales, the council of a county, London borough or district,
(b)in Scotland, the council of a region, islands area or district, and
(c)in Northern Ireland, the council of a district.
(5)Subsections (2) and (3) of section 250 of the Local Government Act 1972 (which relate to the attendance of witnesses at inquiries) shall apply in relation to any local inquiry which the Boundary Commission for England or the Boundary Commission for Wales may cause to be held in pursuance of this Act.
(6)In relation to any local inquiry which the Boundary Commission for Scotland may cause to be held in pursuance of this Act, the said subsections (2) and (3) shall apply as if that Act applied to Scotland but with the substitution of references to an order for references to a summons.
(7)In relation to any local inquiry which the Boundary Commission for Northern Ireland may cause to be held in pursuance of this Act, sections 19 and 20 of the Poor Relief (Ireland) (No. 2) Act 1847 shall apply.
7Consequential amendments
Schedule 3 to this Act shall have effect.
8Repeals and revocation
(1)The enactments specified in Schedule 4 to this Act are hereby repealed to the extent specified in the third column of that Schedule.
(2)Article 2(7) of the Local Government Reorganisation (Consequential Provisions) (Northern Ireland) Order 1973 is hereby revoked.
(3)Where a period of time specified in any enactment repealed by this Act is current at the commencement of this Act, this Act shall have effect as if the corresponding provision of this Act had been in force when the period began to run.
9Citation, commencement and extent
(1)This Act may be cited as the Parliamentary Constituencies Act 1986, and shall be included among the Acts which may be cited as the Representation of the People Acts.
(2)This Act shall come into force at the end of the period of three months beginning with the day on which it is passed.
(3)This Act extends to Northern Ireland.

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1Validation of approved block grant determinations.
The enactments relating to determinations under section 59 of the Local Government, Planning and Land Act 1980 (adjustment of block grant by use of multipliers) shall be deemed to have been complied with in the case of all determinations made or purporting to be made under that section and specified in Rate Support Grant Reports or supplementary reports approved by the House of Commons on or before 21st January 1986.
2Adjustment of block grant to limit effects of changes.
(1)As respects determinations made under section 59 of the said Act of 1980 after the passing of this Act the following provisions shall have effect instead of subsection (6)(a) of that section and section 8(3)(a) of the Local Government Finance Act 1982.
(2)The power conferred by section 59(1) may be exercised for title purpose of limiting or avoiding the effect on—
(a)the amount of block grant payable to a local authority for any year; or
(b)the contribution made or to be made by ratepayers in any year to the expenditure of the local authorities exercising functions in their area, of any difference or differences between that year and the previous year in any of the matters relevant to the calculation of block grant.
(3)The power may be exercised for the purpose mentioned in subsection (2) above in respect of such difference or differences and, in the case of a limitation, to such extent as the Secretary of State thinks desirable ; but he shall not exercise the power for that purpose so as to decrease the amount of block grant payable to a local authority for any year unless he is satisfied that it is necessary to do so in order to prevent the difference in question having an unreasonable effect on the way in which block grant for that year is distributed or on the contribution made or to be made by ratepayers in that year to the expenditure of local authorities.
(4)Where the Secretary of State decides to exercise the power for the purpose mentioned in subsection (2) above in respect of any difference, the effect that the difference would have had shall be calculated, and any limit imposed by him shall be determined, in such manner as he thinks appropriate.
3Other rate support grant amendments.
(1)Part VI of the Local Government, Planning and Land Act 1980 and Part II of and Schedule 2 to the Local Government Finance Act 1982 shall have effect with the amendments specified in Schedule 1 to this Act, being amendments for clarifying and amending the provisions relating to rate support grants and amendments consequential on section 2 above.
(2)Those amendments shall have effect in relation to any exercise after the passing of this Act of the powers conferred by those provisions in relation to any year beginning on or after 1st April 1982 except that the amendments in paragraphs 1, 2, 3, 8,9, 11 and 12 shall be deemed always to have had effect.
4Short title, interpretation, repeals, and extent.
(1)This Act may be cited as the Rate Support Grants Act 1986.
(2)In sections 1 and 2 above references to section 59 of the said Act of 1980 include references to paragraph 5(1) of Schedule 2 to the Local Government Finance Act 1982 (which makes corresponding provision for the Receiver for the Metropolitan Police District) and in section 2 above " local authority " means any body (including the Receiver) which is a local authority for the purposes of Part VI of the said Act 1980 and " year " has the same meaning as in that Part.
(3)The enactments mentioned in Schedule 2 to this Act are hereby repealed to the extent specified in the third column of that Schedule.
(4)This Act extends to England and Wales only.

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1Transfer of persons engaged in dockyard services.
(1)This section applies in relation to such services for or in connection with ships or vessels or related establishments in the service of the Crown, provided at such dockyards, as may, in accordance with subsection (12) below, be designated by the Secretary of State by order; and in this section, in relation to a designated dockyard—" the dockyard undertaking" means the provision by the Crown of designated dockyard services at the dockyard; and
" the qualified dockyard service employees" means the persons employed in or in connection with the dockyard undertaking in the civil service of the Crown on such day as the Secretary of State appoints by order.
(2)If, as regards a designated dockyard, the Secretary of State makes arrangements—
(a)for a company to provide designated dockyard services at the dockyard under contract with him, and
(b)for that or another company—
(i)to become the employer of such of the qualified dockyard service employees at the dockyard as are employees to whom the arrangements apply, and
(ii)to acquire from him rights in or over the dockyard or any part of it and any property used for the purposes of the dockyard undertaking,with a view to their services and that property being made available for the provision of the designated dockyard services at the dockyard,
subsections (4) to (11) below shall have effect in relation to the employees to whom the arrangements apply.
(3)The arrangements made by the Secretary of State as regards a designated dockyard may include the formation of a company with a view to, or for any purpose of, the provision of designated dockyard services at the dockyard.
(4)The Transfer of Undertakings (Protection of Employment) Regulations 1981 shall, subject to subsection (5) below, apply to the transfer of the dockyard undertaking or any part of it whether or not, apart from this provision, the undertaking would be treated as an undertaking in the nature of a commercial venture for the purposes of those Regulations, and, for those purposes, the services of the qualified dockyard service employees together with the rights in or over the dockyard and property used for the purposes of the undertaking shall be treated as a part of that undertaking capable of being transferred as a business whether or not the company which is to become their employer also provides designated dockyard services.
(5)The Transfer of Undertakings (Protection of Employment) Regulations 1981, in their application to the transfer of the dockyard Undertaking or any part of it, shall have effect as if, for regulation 10 (duty to inform and consult trade union representatives), there were substituted the provisions of subsections (6) to (9) below, and (unless the remedy provided by section 2 in invoked) the remedies by way of complaint to an industrial tribunal provided for by, and the other provisions of, regulation 11 shall be available and shall apply in relation to those subsections as they would in relation to regulation 10 or any corresponding provision of it.
(6)Long enough before the transfer to enable consultations to take place between the Secretary of State and the representatives of the independent trade unions recognised by him in respect of the employees, the Secretary of State shall, in accordance with subsection (13) below, inform those representatives of—
(a)the fact that the transfer is to take place, when approximately it is to take place, and the reasons for it;
(b)the legal, economic and social implications of the transfer for the employees;
(c)the measures which he envisages he will, in connection with the transfer, take in relation to those employees or, if he envisages that no measures will be so taken, that fact; and
(d)the measures which the company which is to become their employer envisages that it will, in connection with the transfer, take in relation to those employees or, if the company envisages that no measures will be so taken, that fact.
(7)The company which is to become their employer shall give to the Secretary of State such information at such a time as will enable him to perform the duty imposed on him by virtue of subsection (6)(d) above.
(8)The Secretary of State, where he envisages that he will, in connection with the transfer, be taking measures in relation to employees in respect of whom an independent trade union is recognised by him, shall enter into consultations with the representatives of the trade unions and in the course of those consultations shall—
(a)consider any representations made by the trade union representatives, and
(b)reply to those representations, and, if he rejects any of those representations, give his reasons.
(9)If in any case there are special circumstances which render it not reasonably practicable for the Secretary of State to perform a duty imposed on him by subsection (6) or (8) above, he shall take all such steps towards performing that duty as are reasonably practicable in the circumstances.
(10)Where in pursuance of the arrangements referred to in subsection (2)(b) above a company is to become the employer of any person none of the agreed redundancy procedures applicable to persons employed in the civil service of the Crown shall apply to him.
(11)Where in pursuance of the arrangements referred to in subsection (2)(b) above—
(a)a person ceases to be employed in the civil service of the Crown on becoming employed by a company, and
(b)he would not have so ceased if it were not for those arrangements,he shall not, on so ceasing, be treated for the purposes of any scheme under section 1 of the Superannuation Act 1972 as having retired on redundancy.
(12)The power to make an order under subsection (1) above is exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament and the dockyards that may be designated by such an order are those dockyards which are Royal Dockyards when this Act comes into force.
(13)In this Act—
" company " means a company formed under the Companies Acts and " formed ", with reference to the purposes of a company, includes the alteration of its objects;
" the Companies Acts " means the Companies Act 1985, the Companies Act 1948 or any Act repealed by that Act of 1948;
" designated ", with reference to a dockyard or services, means designated under subsection (1) above; and
" dockyard contractor " means a company which for the time being provides services which are designated dockyard services at a designated dockyard under contract with the Secretary of State or, by making the services of employees or property available, enables those services to be provided, whether by a company or by the Secretary of State;
" trade union " and " independent trade union " have the same meaning as in the Trade Union and Labour Relations Act 1974 and " recognised ", in relation to an independent trade union, means recognised to any extent for the purpose of collective bargaining (within the meaning of the Employment Protection Act 1975);
and any information which is to be given to the representatives of a trade union shall be delivered to them or sent by post to an address notified by them to the employer, or sent by post to the union at the address of its head or main office.
2Failure to inform or consult trade unions: High Court and Court of Session remedies.
(1)A trade union as respects which the Secretary of State has a duty under section 1(6) or (8) above to give information or enter into consultations may, where it alleges that the Secretary of State has failed to fulfil that duty, bring an action in the High Court for a declaration as to whether or not he has failed to fulfil that duty, and the Court may make a declaration accordingly.
(2)In Scotland, a trade union as respects which the Secretary of State has a duty under section 1(6) or (8) above to give information or enter into consultations may, where it alleges that the Secretary of State has failed to fulfil that duty, raise an action in the Court of Session for a declaration as to whether or not he has failed to fulfil that duty, and the Court may make a declaration accordingly.
(3)No proceedings may be brought under this section if a complaint to an industrial tribunal has been made under the provisions applied by section 1(5) above.
3Provisions as regards premises used for transferred services.
(1)All the land in a designated dockyard shall, whatever the respective rights in or over any part of it of the Secretary of State and a dockyard contractor, be treated for the purposes of—
(a)section 3 of the Special Constables Act 1923 (appointment of constables in respect of Her Majesty's dockyards),
(b)Part II of the Military Lands Act 1892 (byelaws for lands under the management of Secretary of State used for service purposes), and
(c)the General Rate Act 1967 or, in Scotland, the Valuation Acts (under which rates are levied except on land occupied by or on behalf of the Crown for public purposes),as land or, in Scotland, land or heritages under the control or management of the Secretary of State or the Defence Council, or occupied on behalf of the Crown, for naval, military or air force purposes or the purposes of his department or for public purposes, as the case may be, and all instruments, authorities, powers and privileges subsisting under those enactments at the commencement of this Act shall (until revoked) continue in force accordingly.
(2)Part II of the Landlord and Tenant Act 1954 (security of tenure for business tenants) shall not apply to any tenancy granted to a dockyard contractor in respect of any land in a designated dockyard.
4Expenses of Secretary of State.
There shall be paid out of money provided by Parliament any expenses of the Secretary of State—
(a)incurred in connection with the formation of any company formed with a view to, or for any purpose of, the provision of designated dockyard services at a designated dockyard or the operation of any such company wholly owned by the Secretary of State; or
(b)incurred in assuming responsibility for any liabilities of that company or any other company which is or has been a dockyard contractor arising out of the provision of designated dockyard services or to or in respect of persons employed or formerly employed in or in connection with the provision of those services.
5Short title and commencement.
(1)This Act may be cited as the Dockyard Services Act 1986.
(2)This Act shall come into force at the end of the period of two months beginning with the day on which it is passed.

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1The Building Societies Commission
(1)For the purposes of this Act there shall be established a body of Commissioners to be called the Building Societies Commission (in this Act referred to as " the Commission ").
(2)The Commission shall consist of not less than four and not more than ten members to be appointed by the Treasury and the Treasury shall appoint one member (to be known as the First Commissioner) to be the chairman, and another member to be the deputy chairman, of the Commission.
(3)Any appointment under subsection (2) above may be on either a full-time or a part-time basis.
(4)The general functions of the Commission shall be—
(a)to promote the protection by each building society of the investments of its shareholders and depositors ;
(b)to promote the financial stability of building societies generally;
(c)to secure that the principal purpose of building societies remains that of raising, primarily from their members, funds for making advances to members secured upon land for their residential use ;
(d)to administer the system of regulation of building societies provided for by or under this Act; and
(e)to advise and make recommendations to the Treasury or other government departments on any matter relating to building societies;and the Commission shall have the other functions conferred on it by or under the subsequent provisions of this Act.
(5)The Commission shall have power to do anything which is calculated to facilitate the discharge of its functions, or is incidental or conducive to their discharge.
(6)The functions of the Commission, and of its officers and employees, shall be performed on behalf of the Crown.
(7)Schedule 1 to this Act has effect with respect to the Commission.
2Financial provision for Commission
(1)There shall be charged on building societies such a general charge towards the expenses of the Commission and such fees in respect of the exercise of its functions as are authorised under this section.
(2)The Treasury may, by regulations, make provision for—
(a)a general charge to be levied, with respect to each accounting year of the Commission, on every authorised building society to be paid at such rate computed by reference to such criteria, at such time and in such manner as may be prescribed; and
(b)fees of such amounts as may be prescribed to be paid by building societies in respect of the exercise of the Commission's functions in relation to them.
(3)The provision to be made from time to time under subsection (2) above, by way of the general charge and fees, shall be such as to produce an annual revenue of the Commission sufficient to meet its expenses properly chargeable to revenue account, taking one year with another.
(4)Regulations under subsection (2) above may include—
(a)provision for any fees payable by societies to be reduced or for payment of any fees to be waived by the Commission in circumstances determined by or under the regulations; and
(b)such incidental, supplementary and transitional provision as appears to the Treasury to be necessary or expedient.
(5)The power to make regulations under subsection (2) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(6)The amounts received by the Commission under this section shall be applied as an appropriation in aid of money provided by Parliament for the expenses of the Commission under this Act, and in so far as not so applied, shall be paid into the Consolidated Fund.
(7)In this section—
" authorised ", in relation to an accounting year of the Commission, means authorised at any time during that year ; and
" prescribed " means prescribed in regulations under subsection (2) above.
3Accounts of Commission and audit
(1)The Commission shall keep proper accounts and proper accounting records and shall prepare in respect of each accounting year a statement of accounts in such form as the Treasury may direct.
(2)The statement of the accounts required by subsection (1) above may be combined with the statement of the accounts of the Chief Registrar which he is required to prepare as regards his functions.
(3)The Commission shall send to the Treasury and to the Comptroller and Auditor General, before the end of the period of seven months after the end of each accounting year, a copy of the statement of accounts for that year.
(4)The Comptroller and Auditor General shall examine, certify and report on every statement of accounts received by him from the Commission and shall lay a copy of the statement and of his report thereon before each House of Parliament.
(5)In this Part " accounting year ", in relation to the Commission, means the period of twelve months ending with 31st March in any year, except that the Commission's first accounting year shall end on 31st March 1987.
4Annual and other reports
(1)It shall be the duty of the Commission to lay before the Treasury and before Parliament as soon as possible after the end of each accounting year a report on the discharge of its functions during that year.
(2)The annual report shall include a record of the terms of every determination of the powers of a building society published by the Commission under section 39 during that year.
(3)The Commission may lay before Parliament from time to time such other reports relating to the discharge of its functions, whether in relation to building societies generally or a particular building society, as it thinks fit.
Part II
Constitution of Building Societies

Establishment

5Establishment, constitution and powers
(1)A society may be established under this Act if its purpose or principal purpose is that of raising, primarily by the subscriptions of the members, a stock or fund for making to them advances secured on land for their residential use.
(2)A society is established under this Act on compliance by the persons establishing it with the scheduled requirements and is incorporated under this Act as from the date of registration by the central office.
(3)A society incorporated under this Act is referred to in this Act as a" building society ".
(4)A society incorporated under the repealed enactments whose principal office, as registered with the central office immediately before the commencement of this section, was in the United Kingdom, shall be deemed to be registered (and accordingly as incorporated) under this Act.
(5)A building society shall have the powers conferred on building societies by or under the subsequent provisions of this Act subject, however, to—
(a)any specified restriction assumed by the society;
(b)the operation of any provision by virtue of which a power is not available to a building society ;
(c)compliance with any requirement that, for a power to be exercisable by a building society, it must be adopted by the society ; and
(d)the exercise by the Commission of any of its functions by virtue of which the society is precluded from exercising or is subject to restrictions on the exercise of any of its powers.
(6)Powers are adopted by a building society for the purposes of this Act by its compliance with the scheduled requirements and, subject to any provision of this Act to the contrary, may be adopted to any specified extent.
(7)Restrictions on its powers are assumed by a building society for the purposes of this Act by its compliance with the scheduled requirements.
(8)Schedule 2 to this Act has effect as respects the constitution, powers, and regulation of building societies and in that Schedule—
(a)Part I makes provision with respect to the constitution,memorandum, rules and certain incidents of membership ;
(b)Part II makes provision for the purpose of precluding a society from anticipating the adoption of powers; and
(c)Part III makes provision with respect to meetings, postal ballots and resolutions; and in this section " scheduled ", with reference to requirements for establishment or for the adoption of powers or the assumption of restrictions on powers, means contained in that Schedule and " specified ", with reference to the adoption of powers or the assumption of restrictions on powers, means specified in the memorandum.
(9)Any obligation imposed by this Act or the rules of a building society to give or send notices or other documents to members is subject to paragraph 14 of that Schedule.
(10)In this Act, except sections 10 to 13, " land ", in the expression " advance secured on land ", means land in the United Kingdom, and, in so far as land in other countries or territories is, under any provision of this Act, land on which advances may be secured, land in that other country or territory.
6Power to hold land etc. for purposes of its business
(1)A building society may acquire and hold premises for the purpose of conducting its business.
(2)A building society may, otherwise than by acquisition, provide itself with premises for the purpose of conducting its business.
(3)A building society which has subsidiaries or other associated bodies, in addition to exercising the powers conferred by subsections (1) and (2) above as regards premises from which the society's business is to be conducted by a subsidiary or associated body, may exercise corresponding powers for the purpose of enabling a subsidiary or other associated body to conduct the business of that body from the premises.
(4)A building society may exercise the powers conferred by subsections (1) and (2) above as regards premises situated outside, as well as premises situated within, the United Kingdom.
(5)If the acquisition or provision of any premises is necessary for the purpose of the conduct of the business of a building society or a subsidiary or other associated body, the society may acquire or otherwise provide itself with and hold the premises under this section notwithstanding that part only of the premises is or will be required for that purpose.
(6)A building society—
(a)may dispose of property held under this section; and
(b)in the event that no part of the premises comes to be or,as the case may be, is any longer occupied for the conduct of the business of the society or a subsidiary or associated body, shall, subject to subsection (7) below, sell its estate or interest in the premises as soon as it is conveniently practicable to do so without undue loss.
(7)Subsection (6)(b) above does not require a building society to sell any property if the society may hold the property under section 17 and elects to do so by a resolution of the board of directors.
Raising funds and borrowing

7Power to raise funds and borrow money and limit on non-retail funds and borrowing
(1)Subject to the provisions of this section and sections 8 and 9, a building society may—
(a)raise funds by the issue of shares to members, or
(b)borrow money and accordingly receive deposits from any person, to be applied for the purposes of the society.
(2)The power to raise funds by the issue of shares is a power to issue shares of one or more denominations, either as shares paid up in full or as shares to be paid by periodical or other subscriptions, and with or without accumulating interest; and funds so raised may be repaid when they are no longer required for the purposes of the society.
(3)Subject to subsection (14) below, the liabilities of a building society in respect of its non-retail funds and deposits shall not exceed at any time the prescribed percentage of the society's total liabilities at that time in respect of shares in or money deposited with the society.
(4)For the purposes of subsection (3) above, a building society's liabilities in respect of its non-retail funds and deposits are, subject to subsections (5) and (9) below, its liabilities in respect of the principal of and interest payable on or under—
(a)transferable instruments,
(b)qualifying time deposits,
(c)shares in the society held by, or by a trustee for, and(to the extent the liabilities do not fall within (a) or (b) above) sums deposited with the society by, or by a trustee for—
(i)any body corporate,
(ii)a friendly society registered under the Friendly Societies Act 1974 or the Friendly Societies Act (Northern Ireland) 1970,
(iii)a trade union (within the meaning of the Trade Union and Labour Relations Act 1974),
(d)shares in the society (to the extent the liabilities do not fall within (c) above) held by, and (to the extent the liabilities do not fall within (a), (b) or (c) above) sums deposited with the society by—
(i)a body of persons or trust established for charitable purposes only, or
(ii)the administrator of an approved retirement benefits scheme.
(5)If a building society so elects with respect to any financial year its liabilities in respect of shares or deposits falling within paragraphs (c) or (d) (but no other provision) of subsection (4) above shall, subject to subsections (6) and (7) below, not be counted towards the limit in force under subsection (3) above.
(6)The liabilities of the society to any person shall not, by virtue of an election under subsection (5) above, be disregarded at any time during the financial year to which the election relates if at that time the liabilities to that person exceed the prescribed amount; and in that event all the society's liabilities to that person shall count towards the limit in force under subsection (3) above.
(7)To be effective for the purposes of subsection (5) above, an election must apply to the society's liabilities in respect of all its shareholders and depositors who fall within subsection (4)(c) and (d) above and notice of it must be given to the Commission before the beginning of the financial year to which it relates.
(8)A copy of the notice shall also be sent to the central office and the central office shall keep the copy in the public file of the society.
(9)The Commission may by order made with the consent of the Treasury amend subsection (4) above by adding to or deleting from it any description of property or right or by varying any description of property or right for the time being specified in it and an order under this subsection may—
(a)define property or rights by reference to any criteria including the description of person who holds the property or rights,
(b)make any consequential amendment or repeal in that subsection, subsections (5) to (8) above or subsection (19) below, and
(c)make such supplementary, transitional and saving provision as appears to the Commission to be necessary or expedient.
(10)In determining for the purposes of subsection (3) above the liabilities of a building society with which another body corporate is associated there shall, subject to subsection (13) below, be attributed to the society, in accordance with aggregation rules made by the Commission with the consent of the Treasury under this subsection, the whole or part of the liabilities of whatever description of the associated body, as provided in the rules and subject to any exceptions provided in the rules.
(11)The power to make aggregation rules under subsection (10) above includes power to make—
(a)different rules for different circumstances,
(b)provision for liabilities of societies to be disregarded;and
(c)such supplementary, transitional and saving provision as appears to the Commission to be necessary or expedient.
(12)The power to make aggregation rules under subsection (10) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(13)The Commission may, on the application of a building society, approve rules to be applied for the purposes of subsection (3) above for the attribution to the society of liabilities of bodies associated with the society; and so long as the rules continue to be approved by the Commission they, and not the aggregation rules in force under subsection (10) above, shall apply for the attribution of liabilities for the purposes of subsection (3) above.
(14)Where money is lent to a building society by another such society in accordance with an authority given by the Commission under section 33 the liabilities in respect of the loan shall be disregarded for the purposes of subsection (3) above.
(15)The prescribed percentage for the purposes of subsection (3) above is 20 per cent, or such other percentage not exceeding 40 per cent, as is for the time being substituted for it by order of the Commission made with the consent of the Treasury.
(16)The prescribed amount for the purposes of subsection (6) above is £50,000 or such other amount as is for the time being substituted for it by order of the Commission made with the consent of the Treasury.
(17)The power to make an order under subsection (9), (15) or (16) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(18)If the liabilities of a building society to which subsection (3) above applies exceed at any time the limit in force under that subsection the powers conferred on the Commission by section 36 shall become exercisable in relation to the society, but exceeding the limit shall not affect the validity of transactions effected in excess of it.
(19)In this section—
" qualifying time deposit" means a deposit in sterling made with the society as to which the following conditions are satisfied, that is to say—
(i)the amount of the deposit is or exceeds £50,000;
(ii)the deposit is repayable at the end of a specified period which expires before the end of the period of 12 months beginning on the date on which the deposit is made ; and
(iii)the right to repayment is not assignable ;
" retirement benefits scheme " means a retirement benefits scheme within the meaning of Chapter II of Part II of the Finance Act 1970 (occupational pension schemes) and " approved " means approved for the time being by the Commissioners of Inland Revenue for the purposes of that Chapter; and
" transferable instrument" means an instrument which embodies a right, transferable by delivery of the instrument, to receive an amount referable to a deposit with the society.
8Proportion of liabilities to be in form of shares
(1)Subject to subsection (2) below, a building society shall secure that the amount of the principal of, and interest payable on, sums deposited with the society does not at any time exceed 50 per cent, of the aggregate of that amount and the principal value of, and interest payable on, shares in the society.
(2)The following liabilities shall be disregarded for the purposes of this section—
(a)deposits of such descriptions as may be prescribed for those purposes by the Commission by order made with the consent of the Treasury,
(b)deferred shares, and
(c)loans made to the society in accordance with an authority given by the Commission under section 33.
(3)In determining for the purposes of subsection (1) above the liabilities in respect of deposits of a building society with which another body corporate is associated there shall, subject to subsection (5) below, be attributed to the society, in accordance with aggregation rules made by the Commission with the consent of the Treasury under this subsection, the whole or part of the liabilities of whatever description of the associated body, as provided in the rules and subject to any exception provided in the rules.
(4)The power to make aggregation rules under subsection (3) above includes power to make—
(a)different rules for different circumstances,
(b)provision for liabilities of societies to be disregarded, and
(c)such supplementary, transitional and saving provision as appears to the Commission to be necessary or expedient.
(5)The Commission may, on the application of a building society, approve rules to be applied for the purposes of subsection (1) above for the attribution to the society of liabilities of bodies associated with the society; and so long as the rules continue to be approved by the Commission they, and not the aggregation rules in force under subsection (3) above, shall apply for the attribution of liabilities for the purposes of subsection (1) above.
(6)If a building society receives deposits in excess of the limit permitted under this section the powers conferred on the Commission by section 36 shall become exercisable in relation to the society, but exceeding the limit shall not affect the validity of transactions effected in excess of it.
(7)The power to make an order under subsection (2)(a) or rules under subsection (3) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
9Initial authorisation to raise funds and borrow money
(1)Except to the extent permitted by subsection (3) below, a building society shall not raise money from members or accept deposits of money unless there is in force an authorisation of the Commission granted under this section or treated as granted under this section by any provisions of this Act.
(2)Authorisation under this section shall, if granted, be granted unconditionally or subject to conditions as provided by subsection (4) or (5) below.
(3)Authorisation is not required for—
(a)the acceptance of payments by way of subscription for deferred shares unless the aggregate of the payments exceeds the amount produced by multiplying the prescribed minimum for qualifying capital by the factor of 2 1/2 or such other factor as may be substituted for it by order of the Commission made with the consent of the Treasury;
(b)the acceptance of payments for amounts due in respect of shares which represent interest on, or the repayment of, advances made to the holders of shares;
(c)borrowing from a banking or finance company, orfrom a director or other officer of the society, if the society has obtained the consent in writing of the Commission ; or
(d)borrowing under section 33.
(4)The Commission, on an application duly made for authorisation under this section, shall grant unconditional authorisation to the building society if it is satisfied that—
(a)the society has qualifying capital of an amount which is not less than the prescribed minimum;
(b)the chairman of the board of directors and any executive directors, the chief executive, the secretary and the managers (if any) are each fit and proper persons to hold their respective offices in the society;
(c)the board of directors, with the chief executive and secretary, have the capacity and intention to direct the affairs of the society in accordance with the criteria of prudent management and, in so far as those criteria fell to be satisfied before the date of the application, have secured that they were satisfied; and
(d)the investments of shareholders and depositors will be adequately protected without the imposition of conditions.
(5)If the Commission, on an application so made, is not satisfied of the matters specified in subsection (4) above in relation to the society, it shall—
(a)if those matters are or include the matters specified in paragraphs (a) and (b), refuse to grant authorisation ;
(b)in any other case, if it is satisfied that the imposition of conditions would secure the protection of the investments of shareholders and depositors, grant authorisation subject to such conditions to be complied with by the society as the Commission thinks fit to impose to secure that purpose ; or
(c)if not so satisfied, refuse to grant authorisation.
(6)The conditions that may be imposed under subsection (5) above on granting authorisation to a society may—
(a)relate to any activities of the society, whether or not those referred to in subsection (1) above ; and
(b)require the society to take certain steps or to refrain from adopting a particular course of action or to restrict the scope of its business in a particular way.
(7)Without prejudice to the generality of subsection (6) above, conditions imposed under subsection (5) above may—
(a)impose limitations on the issue of shares, acceptance of deposits or the making of advances or other loans ;
(b)require the society to take steps with regard to the conduct of the business of any subsidiary or associated body; and
(c)require the removal of any director or other officer.
(8)The provisions of Schedule 3 to this Act regulating—
(a)the making and determination of applications for authorisation,
(b)the furnishing of information or additional information in connection with such applications, and
(c)the imposition of conditions of authorisation,apply in relation to authorisation under this section.
(9)Conditions imposed under subsection (5) above—
(a)may be varied from time to time (and notwithstanding any pending appeal) by agreement between the Commission and the society; and
(b)may be revoked at any time by the Commission if it is satisfied that the investments of shareholders and depositors will be adequately protected without the conditions ;but paragraph (b) above is without prejudice to the power of the Commission, under Part VI, to impose other conditions.
(10)On granting authorisation to a building society under this section the Commission shall inform the central office of the fact and the central office shall record that fact, and the date on which the authorisation was granted, in the public file of the society.
(11)If, in contravention of subsection (1) above, a building society raises money from members or accepts deposits of money, then—
(a)the society shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum; and
(b)any officer of the society who is also guilty of the offence shall be liable—
(i)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both, and
(ii)on summary conviction, to a fine not exceeding the statutory maximum;but such a contravention does not affect any civil liability arising in respect of the acceptance or of the money accepted.
(12)Failure by a society to comply with conditions imposed under this section on granting authorisation to the society shall render it liable, if other conditions are not imposed on it under Part VI, to have its authorisation revoked under that Part.
(13)For the purposes of this section, in relation to a building society—
" business "includes business the society proposes to carry on;
" the prescribed minimum ", in relation to qualifying capital, is £100,000 or such other sum as the Commission may specify by order made with the consent of the Treasury;
" qualifying capital", in relation to a building society applying for authorisation, means,
(a)the aggregate of the nominal value of the qualifying deferred shares issued at the date of the application and the amount of the reserves as shown in the last balance sheet of the society less any accumulated deficit as so shown; or
(b)where there is no balance sheet of the society, the nominal value of the qualifying deferred shares issued at the date of application ; and
" qualifying deferred shares " means deferred shares other than deferred shares which, by virtue of regulations under section 45(5), are not included in capital resources aggregated with reserves for the purposes of the first criterion in subsection (3) of that section.
(14)Any power of the Commission to make an order under this section is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
Part III
Advances, Loans and Other Assets

Class 1 advances and class 2 advances secured on land

10Advances secured on land
(1)A building society may make advances to members (in this Act referred to as " advances secured on land ") secured by—
(a)a mortgage of a legal estate or, as provided under subsection (6) below, an equitable interest in land in England and Wales or Northern Ireland, or
(b)a heritable security over land in Scotland,and for that purpose may (in England and Wales or Northern Ireland) hold land with the right of foreclosure.
(2)Advances secured on land may, in accordance with sections 11 and 12—
(a)be fully or partly secured by a mortgage of the legal estate or equitable interest in land in England and Wales or Northern Ireland, or
(b)be fully secured by a heritable security over land in Scotland,and in this Part " the basic security " means the security constituted by the legal estate in or heritable security over the land or, in a case where an equitable interest in land in England and Wales or Northern Ireland is or is also taken as security by virtue of this section, that constituted by that security or, as the case may be, the combined securities; and a reference to the land which is to secure an advance or on which an advance is secured is a reference to the estate or interest or the heritable security which constitutes or will constitute the basic security.
(3)The power to make an advance secured on land includes power, subject to the restriction imposed by subsection (4) below, to make, as a separate advance, an advance which is to be applied in or towards payment of the deposit for the purchase of the land (in this Part referred to as " an advance for a deposit for the purchase of land.")
(4)The restriction referred to is that an advance for a deposit for the purchase of land must not exceed 10 per cent, of the total amount to be paid for the purchase of the land.
(5)An advance shall be treated for the purposes of this Act as secured by a mortgage of a legal estate in registered land in England and Wales or Northern Ireland notwithstanding that the advance is made before the borrower is registered as proprietor of the estate.
(6)A building society may advance money on the security of an equitable interest in land in England and Wales or Northern Ireland if the equitable interest is an equitable interest in land of a description and is created in circumstances prescribed in an order made by the Commission with the consent of the Treasury under this subsection and any conditions prescribed in the order are complied with.
(7)Any powers conferred on building societies by an order under subsection (6) above may be conferred on building societies of a description specified in the order or all building societies other than those of a description so specified.
(8)The power to make an order under subsection (6) above includes power—
(a)to prescribe the circumstances in which the power conferred by section 17(10) on building societies of the description specified therein is to be available to them ; and
(b)to make such incidental, supplementary and transitional provision as the Commission considers necessary or expedient.
(9)An instrument containing an order under subsection (6) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(10)The power to make advances secured on land includes power to make them on terms that include provision as respects the capital element in the mortgage debt (with or without similar provision as respects the interest element)—
(a)that the amount due to the society may be adjusted from time to time by reference to such public index of prices other than housing prices as is specified in the mortgage;
(b)that the amount due to the society may be adjusted from time to time by reference to such public index of housing prices as is specified in the mortgage;
(c)that the amount due to the society at any time shall be determined by reference to a share, specified or referred to in the mortgage, in the open market value of the property at that time;and, in cases where the amount due to the society in respect of capital exceeds the amount advanced, references in this Act to the repayment of an advance include references to payment of the excess.
(11)Advances secured on land shall be classified for the purposes of the requirements of this Part for the structure of commercial assets into—
(a)class 1 advances, and
(b)class 2 advances ;and in this Act " advances fully secured on land " means advances which are class 1 or class 2 advances, and any reference to " fully secured " shall be construed accordingly.
(12)Nothing in this section or section 11 or 12 is to be taken as precluding a society from taking other security for an advance secured on land than such security as is required for an advance to be a class 1 or class 2 advance under those sections; but the value of the other security shall be disregarded for the purpose of classifying the advance as a class 1 or class 2 advance.
11Class 1 and class 2 advances
(1)The provisions of this section and section 12 define what is a class 1 advance and what is a class 2 advance for the purpose of the requirements of this Part for the structure of commercial assets and when an advance may, for those purposes, be treated partly as a class 1 advance and partly as a class 2 advance.
(2)Class 1 advances are advances as to which the society when it makes the advance is satisfied that the advance is an advance secured on land and that—
(a)the borrower is an individual;
(b)the land is for the residential use of the borrower or a dependant of his of a prescribed description ;
(c)the amount advanced will not exceed the value of the basic security (after deducting from that value any mortgage debt of the borrower to the society outstanding under a mortgage of the land); and
(d)subject to subsection (5) below, no other mortgage of the land which is to secure the advance is outstanding in favour of a person other than the society ;and which are not made on terms as respects the capital element of the mortgage debt authorised by section 10(10)(b) or (c).
(3)Subject to any order made under section 12(1), the requirement in subsection (2)(b) above shall be treated as satisfied if no less than 40 per cent, of the area of the land is used for residential purposes by the borrower or a dependant of his of a prescribed description.
(4)Class 2 advances are advances as to which the society when it makes the advance—
(a)either is not satisfied that the requirements for the time being of subsection (2) above are fulfilled or is satisfied that any of them is not fulfilled, but
(b)is satisfied that the advance is an advance secured on land,and
(c)is satisfied, where the amount advanced will exceed the value of the basic security (after deducting from that value any mortgage debt of the borrower outstanding under a mortgage of the land), that the excess will be secured by the taking of security of a prescribed description in addition to the basic security, and
(d)is satisfied that no, or no more than one, other mortgage of the land which is to secure the advance is outstanding in favour of a person other than the society.
(5)The requirement in subsection (2)(d) and (4)(d) above shall be treated as satisfied if the advance is made on terms that the other mortgage is redeemed or postponed to the basic security.
(6)An advance for a deposit for the purchase of land is also a class 1 or class 2 advance according as it is made with a view to the making of a class 1 or class 2 advance secured on the land.
(7)Advances which would be class 2, and not class 1, advances by reason only that the extent of the residential use of the land is not such as to satisfy the requirement in subsection (2)(b) above shall be treated as class 1 advances if and to the extent prescribed by an order under section 12(5).
(8)For the purposes of the requirements of this Part for the structure of commercial assets—
(a)class 1 advances constitute class 1 assets, and
(b)class 2 advances constitute class 2 assets,and accordingly the aggregate amount of mortgage debts outstanding in respect of class 2 advances counts in accordance with section 20 towards the limit applicable to class 2 assets under that section.
(9)For the purposes of subsections (2) and (4) above, where a building society makes an advance by instalments, any reference to the time when the society makes the advance is a reference to the time when it pays the first of the instalments, disregarding for this purpose any instalment which is to be applied towards payment of the deposit in respect of the purchase of the land which is to secure the advance.
(10)Subject to subsection (11) below, any land to which a building society becomes absolutely entitled by foreclosure or by release or other extinguishment of a right of redemption—
(a)shall as soon as may be conveniently practicable be sold or converted into money; and
(b)shall, until the sale or conversion, constitute a class 1 asset if the advance secured on the land was a class 1 advance and a class 2 asset if it was a class 2 advance.
(11)Where a building society which has for the tune being adopted the powers conferred by section 17 becomes entitled to land as mentioned in subsection (10) above, and the land is land that may be held under that section, then, if the society—
(a)elects to hold the land under that section, or
(b)without such an election, retains the land after the expiry of the period of twelve months immediately following the date on which it so becomes entitled to the land,the society shall be taken to hold the land under that section.
(12)An election under subsection (11) above shall be made by resolution of the board of directors and shall be irrevocable.
(13)If a building society contravenes subsection (10) above the society shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale and so shall any officer who is also guilty of the offence.
(14)For the purposes of this Act, the mortgage debt at any time, in relation to an advance secured on land, is the total amount outstanding at that time in respect of—
(a)the principal of the advance;
(b)interest on the advance; and
(c)any other sum which the borrower is obliged to pay the society under the terms of the advance.
(15)The reference in subsection (10) above to land to which a building society becomes absolutely entitled by foreclosure includes a reference to land which a building society has acquired by virtue of a decree of foreclosure under section 28 of the Conveyancing and Feudal Reform (Scotland) Act 1970.
12Class 1 and class 2 advances: supplementary provisions
(1)The Commission, by order in a statutory instrument, may as respects class 1 advances—
(a)specify the circumstances in which land is for a person's residential use,
(b)specify who are to be a person's dependants, and
(c)make such other incidental and supplementary and such transitional provision as the Commission considers necessary or expedient,for the purposes of section 11 (2); and in that subsection " prescribed " means prescribed in an order under this subsection.
(2)Without prejudice to the generality of subsection (1)(c) above, an order may prescribe evidence on which a building society is to be entitled to be satisfied (in the absence of evidence to the contrary) that the requirements of section 11(2) are fulfilled as respects an advance secured on land.
(3)The Commission, by order in a statutory instrument, may as respects class 2 advances—
(a)specify descriptions of security falling within this subsection which, for the purposes of paragraph (c) of section 11(4), may be taken for class 2 advances in addition to the basic security; and
(b)make such other incidental or supplementary and such transitional provision as it considers necessary or expedient for the purposes of paragraph (c) or (d) of that subsection;and in that subsection " prescribed " means prescribed in an order under this subsection.
(4)The descriptions of additional security which fall within subsection (3)(a) above are guarantees, indemnities or other contractual promises made by virtue of, or by a public body established by or under, any enactment for the time being in force.
(5)The Commission, by order in a statutory instrument, may, as respects advances to be secured on land which is to any extent to be used for the residential use of borrowers or persons who are dependants of theirs for the purposes of section 11(2)—
(a)require so much of the amount to be advanced as is determined by or under the order to be treated as a class 1 advance;
(b)specify the circumstances in which and the conditions subject to which advances are to be so treated; and
(c)make such incidental, supplementary and transitional provision as the Commission considers necessary or expedient.
(6)The Commission shall not make an order under this section, except with the consent of the Treasury.
(7)An instrument containing an order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(8)For the purpose of facilitating the repayment to a building society of a class 1 advance or a class 2 advance, the society may make to the borrower, by way of addition to the advance, a further advance of or towards the cost of a single premium payable in respect of an appropriate policy of life assurance; and a sum added to an advance under this subsection shall be treated as not forming part of the advance for the purpose of determining whether the requirements of section 11 (2) or (4) are satisfied with respect to the advance.
(9)Where an advance secured on land in England and Wales or Northern Ireland is made, then, for the purpose of determining whether the land is subject to a prior mortgage for the purposes of section 11(2)(d) or (4)(d) above, any outstanding charge over the land which is registered—
(a)in the case of land in England and Wales, in the appropriate local land charges register, and
(b)in the case of land in Northern Ireland, in the statutory charges register under section 87 of, and Schedule 11 to, the Land Registration Act (Northern Ireland) 1970, shall be disregarded.
(10)If at any time when a class 1 advance or a class 2 advance secured on land is outstanding the building society—
(a)is satisfied on a revaluation that the value of the basic security has changed,
(b)is satisfied that so much of the mortgage debt as represents the principal of the advance has changed,
(c)is satisfied on notice given to it by the borrower that there has been a change in the use of the land, or
(d)agrees to a change in the relative priority of the mortgage on which the advance is secured,and is satisfied that the change is such that, if it were to make an advance equal to the mortgage debt at that time, the advance would instead be a class 2 advance or a class 1 advance, as the case may be, the advance shall be reclassified as from that time.
(11)Nothing in subsection (10) above requires a building society to revalue its securities from time to time.
(12)Every building society shall establish and maintain a system to ensure the safe custody of all documents relating to property mortgaged to the society.
(13)In this section "appropriate policy of life assurance", with reference to an advance, means a policy of insurance which satisfies the following requirements, that is to say—
(a)the life assured is that of the person to whom the advance is made or his spouse, his son or his daughter, and
(b)it provides, in the event of the death, before the advance has been repaid, of the person on whose life the policy is effected, for payment of a sum not exceeding the amount sufficient to defray the sums which are, at and after the time of the death, payable to the society in respect of the advance and any addition made in respect of the premium.
13Security for advances: valuation and supplementary and related provisions
(1)It shall be the duty of every director of a building society to satisfy himself that the arrangements made for assessing the adequacy of the security for any advance to be fully secured on land which is to be made by the society are such as may reasonably be expected to ensure that—
(a)an assessment will be made on the occasion of each advance whether or not any previous assessment was made with a view to further advances or re-advances;
(b)each assessment will be made by a person holding office in or employed by the society who is competent to make the assessment and is not disqualified under this section from making it;
(c)each person making the assessment will have furnished to him a written report on the value of the land and any factors likely materially to affect its value made by a person who is competent to value, and is not disqualified under this section from making a report on, the land in question ;but the arrangements need not require each report to be made with a view to a particular assessment so long as it is adequate for the purpose of making the assessment.
(2)In relation to any land which is to secure an advance, the following persons are disqualified from making a report on its value, that is to say—
(a)the directors and any other officer or employee of the society who makes assessments of the adequacy of securities for advances secured on land or who authorises the making of such advances;
(b)where the society has made, or undertaken to make, to any person a payment for introducing to it an applicant for the advance, that person ;
(c)where the advance is to be made following a disposition of the land, any person having a financial interest in the disposition of the land and any director, other officer or employee of his or of an associated employer ; and
(d)where the advance is to be made following a disposition of the land, any person receiving a commission for introducing the parties to the transaction involving the disposition and any director, other officer or employee of his.
(3)In relation to any land which is to secure an advance where the advance is to be made following a disposition of the land, the following persons are disqualified from making an assessment of the security or authorising the making of the advance, that is to say—
(a)any person, other than the building society making the advance, having a financial interest in the disposition of the land and any director, other officer or employee of his or of an associated employer; and
(b)any person receiving a commission for introducing the parties to the transaction involving the disposition and any director, other officer or employee of his.
(4)Any person who, being disqualified from doing so—
(a)makes a report on any land which is to secure an advance,
(b)makes an assessment of the adequacy of the security for an advance, or
(c)authorises the making of an advance,and in the case of a person making a report does so knowing or having reason to believe that the report will be used or is likely to be used for the purposes of the advance, shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.
(5)For the purposes of this section, any two employers are associated if one is a body corporate of which the other (directly or indirectly) has control or if both are bodies corporate of which a third person directly or indirectly has control; and the expression " associated employer " shall be construed accordingly.
(6)In this section " commission " includes any gift, bonus or benefit and, for its purposes, a person shall be taken to have a financial interest in the disposition of any land if, but only if, he would, on a disposition of that land, be entitled (whether directly or indirectly, and whether in possession or not) to the whole or part of the proceeds of the disposition.
(7)Schedule 4 to this Act, which contains supplementary provisions as to mortgages, shall have effect.
Other advances secured on land

14Power to make advances secured on land overseas
(1)The appropriate authority may, with a view to conferring on building societies or building societies of particular descriptions powers to make advances to members secured on land outside the United Kingdom corresponding to the powers to make advances secured on land within the United Kingdom, by order—
(a)designate countries or territories outside the United Kingdom as countries or territories as respects which advances under this section may be made secured on the land;
(b)specify, or provide for the specification by direction of the Commission under the order of, the forms of security on land which may be taken for advances under this section, in any prescribed circumstances and subject to any prescribed conditions ;
(c)determine, or provide for the determination under the order of, the classification of the advances (and accordingly of the mortgage debts) as class 1 advances or class 2 advances for the purposes of the requirements of this Part for the structure of commercial assets;
(d)provide for the application of the provisions of this Part applicable to advances secured on land to advances under this section with such modifications as appear to be appropriate;
(e)provide for any other provisions of this Act to have effect in relation to advances under this section with such modifications as appear to be appropriate ; and
(f)make such incidental, supplemental or transit