I beg to move amendment No. 515, in page 265, line 3, leave out from beginning to end of line 43 on page 266 and insert—

'Part 1

Regulated sector

Business in the regulated sector

1 (1) A business is in the regulated sector to the extent that it engages in any of the following activities—

(a) accepting deposits by a person with permission under Part 4 of the Financial Services and Markets Act 2000 (c. 8) to accept deposits (including, in the case of a building society, the raising of money from members of the society by the issue of shares);

(b) the business of the National Savings Bank;

(c) business carried on by a credit union;

(d) any home-regulated activity carried on by a European institution in respect of which the establishment conditions in paragraph 13 of Schedule 3 to the Financial Services and Markets Act 2000 (c. 8), or the service conditions in paragraph 14 of that Schedule, are satisfied;

(e) any activity carried on for the purpose of raising money authorised to be raised under the National Loans Act 1968 (c.13) under the auspices of the Director of Savings;

(f) the activity of operating a bureau de change, transmitting money (or any representation of monetary value) by any means or cashing cheques which are made payable to customers;

(g) any activity falling within sub-paragraph (2);

(h) any of the activities in points 1 to 12 or 14 of Annex 1 to the Banking Consolidation Directive, ignoring an activity described in any of sub-paragraphs (a) to (g) above;

(i) business which consists of effecting or carrying out contracts of long term insurance by a person who has received official authorisation pursuant to Article 6 or 27 of the First Life Directive.

(2) An activity falls within this sub-paragraph if it constitutes any of the following kinds of regulated activity in the United Kingdom—

(a) dealing in investments as principal or as agent;

(b) arranging deals in investments;

(c) managing investments;

(d) safeguarding and administering investments;

(e) sending dematerialised instructions;

(f) establishing (and taking other steps in relation to) collective investment schemes;

(g) advising on investments.

(3) Paragraphs (a) and (i) of sub-paragraph (1) and sub-paragraph (2) must be read with section 22 of the Financial Services and Markets Act 2000 (c. 8), any relevant order under that section and Schedule 2 to that Act.

2 (1) This paragraph has effect for the purposes of paragraph 1

(2) ''Building society'' has the meaning given by the Building Societies Act 1986.

(3) ''Credit union'' has the meaning given by the Credit Unions Act 1979 (c. 34) or the Credit Unions (Northern Ireland) Order 1985 (S.I. 1985/1205 (N.I. 12)).

(4) ''European institution'' means an EEA firm of the kind mentioned in paragraph 5(b) or (c) of Schedule 3 to the Financial Services and Markets Act 2000 (c. 8) which qualifies for authorisation for the purposes of that Act under paragraph 12 of that Schedule.

(5) ''Home-regulated activity'' in relation to a European institution, means an activity—

(a) which is specified in Annex 1 to the Banking Consolidation Directive and in respect of which a supervisory authority in the home State of the institution has regulatory functions, and

(b) if the institution is an EEA firm of the kind mentioned in paragraph 5(c) of Schedule 3 to the Financial Services and Markets Act 2000 (c. 8), which the institution carries on in its home State.

(6) ''Home State'', in relation to a person incorporated in or formed under the law of another member State, means that State.

(7) The Banking Consolidation Directive is the Directive of the European Parliament and Council relating to the taking up and pursuit of the business of credit institutions (No. 2000/12 EC).

(8) The First Life Directive is the First Council Directive on the co-ordination of laws, regulations and administrative provisions relating to the taking up and pursuit of the business of direct life assurance (No. 79/267/EEC).

Excluded activities

3 A business is not in the regulated sector to the extent that it engages in any of the following activities—

(a) the issue of withdrawable share capital within the limit set by section 6 of the Industrial and Provident Societies Act 1965 by a society registered under that Act;

(b) the acceptance of deposits from the public within the limit set by section 7(3) of that Act by such a society;

(c) the issue of withdrawable share capital within the limit set by section 6 of the Industrial and Provident Societies Act (Northern Ireland) 1969 by a society registered under that Act;

(d) the acceptance of deposits from the public within the limit set by section 7(3) of that Act by such a society;

(e) activities carried on by the Bank of England;

(f) any activity in respect of which an exemption order under section 38 of the Financial Services and Markets Act 2000 (c. 8) has effect if it is carried on by a person who is for the time being specified in the order or falls within a class of persons so specified.

Part 2

Supervisory authorities

4 (1) Each of the following is a supervisory authority—

(a) the Bank of England;

(b) the Financial Services Authority;

(c) the Council of Lloyd's;

(d) the Director General of Fair Trading;

(e) a body which is a designated professional body for the purposes of Part 20 of the Financial Services and Markets Act 2000 (c. 8).

(2) The Secretary of State is also a supervisory authority in the exercise, in relation to a person carrying on a business in the regulated sector, of his functions under the enactments relating to companies or insolvency or under the Financial Services and Markets Act 2000 (c. 8).

(3) The Treasury are also a supervisory authority in the exercise, in relation to a person carrying on a business in the regulated sector, of their functions under the enactments relating to companies or insolvency or under the Financial Services and Markets Act 2000 (c. 8).'.

The amendment would bring schedule 6 into line with the amendments that have been made to the Money Laundering Regulations 1993, as a result of the coming into force of the Financial Services and Markets Act 2000. The relevant amendments to the regulations were made formally on 9 November 2001 and are contained in the Money Laundering Regulations 2001.

Our policy is that the definition of a

''business in the regulated sector''

under the Bill should be the same as that under the money laundering regulations, so that the same group of people will have obligations relating to money laundering imposed on them. Members of the Committee will have noticed that the text that the amendment would substitute is the same as parts 1 and 2 of the schedule 3A that was inserted into the Terrorism Act 2000 by paragraph 5(6) of schedule 2 to the Anti-terrorism, Crime and Security Act 2001.

May I briefly seek your guidance, Mr. O'Brien? I wish to raise three matters, all of which I think may sensibly be debated in a stand part debate, but one of which relates to the amendment. It would be easier for me to raise all my points in a stand part debate, even though one refers to the amendment.

The amendment as outlined covers nearly everything in the schedule. Does the hon. Gentleman want to raise anything arising from the amendment?

If you want me to take them separately, I shall be brief, Mr. O'Brien.

New paragraph 1(1)(h), which the amendment would insert, does not change the wording that caused me concern in the original draft. As I said, this could be a matter to be debated on stand part. New paragraph 1(1)(h) contains the words:

''ignoring an activity described in any of sub-paragraphs (a) to (g)''.

It is worth asking the Minister why the Government should want to ignore something. That wording makes me a bit nervous. I have no disagreement with the attempt to set out what the regulated sector is and listing its activities; that is eminently sensible. However, we cannot allow certain activities to be ignored without explanation.

We are not ignoring those activities. We are trying to make certain that they are not duplicated. Those that are picked up in other parts of

the schedule are not double-counted. That is the only effect of new paragraph 1(1)(h).

Amendment agreed to.

Question proposed, That this schedule, as amended, be the Sixth schedule to the Bill.

With hindsight, the second of my queries could just as well have been raised in discussion on the amendment, but I shall raise it now as a substantive matter. Paragraph 3, headed ''Excluded activities'', contains sub-paragraph (e), which mentions

''activities carried on by the Bank of England''.

I am neither a lawyer nor a financial expert—

Order. I must draw the hon. Gentleman's attention to the fact that we are now discussing an amendment that has been approved. I consider it out of order to start a discussion on it again.

I was simply seeking clarification of the schedule as it now stands. I hope that you will allow me to ask why the activities carried out by the Bank of England—

Order. I advised the hon. Gentleman when we were discussing the amendment that it would be better to discuss the issues under the appropriate amendment. The question that he was going to put to the Minister would have opened up the debate again, and that is not in the best interests of the Committee.

I understand exactly what you say, Mr. O'Brien. Clearly, I must accept what you say. I simply register that it seems reasonable to me to have a stand part discussion. However, there will be other opportunities to raise that point, no doubt.

The last of my points, which is not covered by the Government amendment, relates to part 3 of the schedule, which we did not amend. It is entitled, ''Power to amend'', and it seems appropriate to consider it. It states:

''The Treasury may by order amend Part 1 or 2 of this Schedule.''

We should not let that pass without asking the Minister what the Government have in mind. Why does the Treasury need the power? We are discussing things of importance such as draconian penalties and the reservations that my hon. Friend the Member for Beaconsfield has been, rightly, considering for a long time. If they are so important, why should we allow the procedure to happen by order rather than by allowing the House to consider legislation to amend the schedule? Why does the Treasury need the power in this way? I am no expert on parliamentary procedure, but will the order be made under the affirmative or the negative procedure? We need that information.

Part 3 of schedule 6 contains the order-making power about which the hon. Gentleman is worried. The Treasury may use it to amend the definitions in parts 1 and 2. That could be used to keep the scope of the legislation in line with future extensions of regulations to other sectors that are not currently regulated. The provision will be used when

we get to grips with the second European money laundering directive—I mentioned this in the previous debate—which will extend the money laundering regime to accountants and tax advisers. We will need order-making powers to amend the regulations because other pieces of legislation may impact on the Bill. That is not unusual, and the hon. Gentleman knows that.

I would be grateful if the Minister would tell us whether the procedure would be affirmative or negative.

I apologise to the hon. Gentleman. I think that the negative procedure would be appropriate.

Schedule 6, as amended, agreed to.

Clauses 325 and 326 ordered to stand part of the Bill.