The European Commission “fought hard” to force the FSA to scrap the menu and IDD, Money Marketing can reveal.
The FSA has always maintained that its decision to drop the menu and IDD in May was based purely on its own research which found that the documents had not achieved their objectives and that it had nothing to do with pressure from the European Commission.
In a telephone exchange between this paper and FSA director of retail policy Dan Waters, Waters attacked Money Marketing’s online coverage for suggesting that pressure had been applied from Brussels.
But a letter from a senior member of Commissioner Charlie McCreevy’s cabinet to IFA Simon Mansell, dated July 24 and seen by Money Marketing, demonstrates that pressure was applied by the Commission.
The letter, written by cabinet member Michael Murray, states: “As for the point about the menu and IDD, we fought hard so that the FSA would drop the inclusion of these additional elements for its body of binding rules.”
An FSA spokesman says the regulator stands by its original comments on the reasons for the decision but would not comment on the letter.
The spokesman says: “When we consulted on our new rulebook, we made it clear that our intention to notify retention to the Commission was provisional and we also emphasised our readiness to consider radical change if the results of our research warranted it – and they did.”
Aifa director of public aff-airs Tracey Mullins says: “We wish the FSA had come clean about the full reasoning behind the decision.”
Informed Choice joint managing director Martin Bamford says: “Isn’t it time that we had a bit of a breather just until the UK Government, in conjunction with the European Parliament, works out just who is regulating financial services in the UK? Maybe we should not get too excited about the retail dis-tribution review proposals until we get some clarity over this issue.”
Beachcroft Regulatory Consulting managing director Richard Hobbs says: “The EC’s sentiment in the letter is no surprise. The reality is that Brussels has a major impact on our regulatory regime. John Tiner has said as much in the past so it seems strange for the FSA to deny it in this case.”