44/99
5 March 1999
GOVERNMENT RESPONDS TO CONSULTATION ON FINANCIAL SERVICES AND MARKETS BILL
ALAN MILBURN BACKS LIGHT TOUCH REGULATION WITH PROTECTION WHERE
NECESSARY
The operation of the FSA would be guided by the principle of a light touch where possible with protection where necessary, Chief Secretary Alan Milburn said today.
Mr Milburn was announcing the Government response to the extensive consultation on the Financial Services and Markets Bill, published in draft form in July 1998. Publication today of a progress report on the Bill confirms that the consultation has resulted in significant improvements to the draft Bill including:
- a framework for fair and transparent disciplinary procedures
- improving the requirement for the FSA to consult on and assess the
cost of new regulations - ensuring that the FSA is properly accountable, with annual public
meetings and assessment of its performance against its objectives
by practitioners as well as consumers.
Mr Milburn said:
"I am immensely grateful to the many organisations and individuals who took part in the consultation about the Bill.
"The consultation has revealed widespread support for our proposals and we have been able to take on board some significant suggestions for improvements to the Bill."By creating a single regulator the Bill will streamline regulation for the financial services industry while affording proper protection for the consumer. Our presumption is in favour of light touch regulation where possible with protection where necessary. I know
that Howard Davies who has made excellent progress in setting up the FSA fully shares these objectives."Over-burdensome regulation would stifle innovation and increase consumer costs. The Bill will enhance the competitiveness of the industry while ensuring better protection for financial services customers.
"Nobody should be in any doubt that we will be tough on City crime, malpractice and abuse, and that we will give the FSA the powers it needs to deal with it.
"The changes we have made as a result of consultation will ensure that the FSA uses its powers responsibly and accountably.
"Our plans will enhance the City's already good reputation and will make the FSA an international model for modern regulation.
" The Government's progress report will now be sent to the joint committee established by Parliament to scrutinise the Bill. The Committee, chaired by Lord Burns and drawn from both the House of Lords and the House of Commons, met for the first time this week. It is due to finish its pre-legislative scrutiny at the end of April after which the Bill will commence its Parliamentary stages as soon as possible.
NOTES FOR EDITORS
1. Publication of the Financial Services and Markets Bill Progress Report was announced by Alan Milburn in response to a Parliamentary Question from Jackie Lawrence (Preseli Pembrokeshire).
2. The Financial Services and Markets Bill: A Consultation Document was published, with a document containing an overview of regulatory reform, in July last year (HMT press release 126/98).
3. HM Treasury published two further consultation documents last month: - Draft recognition requirements for Investment Exchanges and Clearing Houses (HMT press release 22/99). Regulated Activities - A Consultation Document (HMT press release
34/99).
4. The Progress Report will be sent to all those interested parties who commented on the Draft Bill during the consultation process.
5. Media enquiries and requests for copies of the Progress Report should be addressed to Charles Keseru in the Treasury press office on
0171 270 5188.
6. Non-media copies are available, free of charge, from 0171 270 4848. The Draft Bill, Progress Report and other associated documents can be accessed on this site.