HISTORIC PRESS RELEASE : Government responds to consultation on Financial Services and Markets Bill * Alan Millburn backs light touch regulation with protection where necessary [March 1999]
The press release issued by HM Treasury on 5 March 1999.
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.
“Overburdensome 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.
