HISTORIC PRESS RELEASE : Stephen Byers outlines proposals to “Enhance London´s reputation and position in financial services” [September 1998]

The press release issued by HM Treasury on 24 September 1998.

“Our reforms of the financial services regulatory regime will enhance our reputation as a clean and attractive place to do business, and increase the public’s confidence in the industry,” said Chief Secretary Stephen Byers today. He was speaking to a Financial Services Authority (FSA) conference in London where he also gave examples of the type of behaviour which will be covered by a new code of conduct.

He also emphasised the importance of having a robust regulatory structure in place to maintain London’s pre-eminence in the financial services area at a time of global economic turmoil elsewhere;

“Recent events in Japan and elsewhere have shown that highly developed economies require highly developed and transparent systems for supervising financial services. Where supervision is ineffective and fails to command confidence the health and growth prospects of the whole economy can be threatened. London and the UK generally has an excellent reputation. The creation of the FSA is an opportunity to enhance that reputation further.

One area which will contribute to enhanced confidence is our new measures to deal with market abuse. These fill a gap that currently exists. A new code of market conduct will underpin this regime. It will detail the type of abuses which we are seeking to deter and set out safe harbours. Examples of the kind of behaviour include:

• artificial transactions which give the market the wrong impression as to the real supply and demand for an investment;
• abusive squeezes whereby the position of one player in the market, who has temporary control over the supply of a product, results in arbitrary prices; and
• misuse of privileged information which is not available to the rest of the market.

These measures, linked to our proposals to deliver greater consumer protection, are all aimed at making sure that the UK has a fair and balanced regime fit for the future.”