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Clause 74

Volume 115: debated on Thursday 7 May 1987

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Meaning Of "Overseas Institution" And "Representative Office"

Lords amendment: No. 36, in page 59, line 13, at end insert

"; and 'establishment', in relation to such an office, includes the making of any arrangements by virtue of which such activities are promoted or assisted from it."

I beg to move, That this House doth agree with the Lords in the said amendment.

Under the Bill, an overseas bank proposing to establish a representative office in the United Kingdom is required to give not less than two months' notice to the Bank of England. As the Bill stood, an overseas bank would not clearly be required to give such notice if it entered into an arrangement with an agent that had already established premises here for the purpose of conducting representative activities through that agent. Therefore, the amendment closes a potential loophole in the requirement to report establishment of a representative office. It is not a loophole which, under current circumstances, is likely to be exploited, but it is wise to close it now because it may well be that, in future, further arrangements will need to be made with regard to representative offices, and it would be unfortunate if the Act, as it would then be, did not cover that point.

Question put and agreed to.

Lords amendment No. 37 agreed to.