Speaking at a Treasury select committee hearing into the work of the FSA this afternoon, Sants was asked whether he thought the regulator had done enough to warn consumers of the risks of investing offshore.
Sants said it was not within the FSA’s remit to supervise companies outside the UK’s borders, but only to regulate advice given by UK IFAs and product literature circulated within the UK.
He said: “We certainly have an obligation to make sure that where those firms are marketing into the UK and fall within our remit in that respect, that the information is clear as to their regulatory status and the status of their consumer protection offering.
“I do believe that that was clear to consumers.”
But he added that the FSA would look into any case where clients feel that they have been mis-sold offshore products by UK-regulated IFAs.
Money Marketing research of offshore bond marketing material in November revealed widespread variations in the material circulated by providers regarding warnings on the lack of protection for cash deposits held via offshore bonds in the event the underlying bank goes bust.
Scottish Life International, Aegon Scottish Equitable International, Axa Isle of Man, Friends Provident, Legal & General International, Canada Life, Skandia and Clerical Medical did not make it clear that there may be depositor protection in the event that the underlying bank used to deposit cash within an offshore bond went bust.