The Government has refused to support an amendment to the Financial Services Bill intended to require the Financial Conduct Authority to raise standards of professionalism, including a mandated training and competence regime for all approved persons in controlled functions.
Tabled by Labour peer Baroness Hayter, the amendment would have seen the FCA specifying minimum thresholds of competence including integrity, professional qualifications, continued professional development and adherence to a recognised code of conduct. The regime would apply to those in retail and wholesale financial services.
During a debate on the bill in the House of Lords last night, Treasury minister and former ifs School of Finance chairman Lord Sassoon said the Government has set up the Tyrie inquiry to look at professional standards in the banking industry.
He added: “Within the overall integrity objective the FCA already has a mandate and powers to deal with these issues. It will specifically have powers to impose standards, including training and qualification, on individuals.
“Training, qualifications and minimum standards will be of considerable importance to the issue of re-establishing a proper banking culture. They are matters which will be relevant to the regulators’ consideration of applications by persons wishing to become approved to carry out significant influence functions, but it is a big step from that to the FCA mandating a training regime across all areas of financial services.”
The amendment was withdrawn but it could be retabled and pushed to a vote during the bill’s report stage.
Baroness Hayter said: ”The higher a practitioner’s commitment to professional standards, the lower is the likelihood of consumer harm and the higher is consumer trust and confidence. This is the case for the whole industry, not just the retail sector. As the Chartered Institute of Securities and Investments has said, it ‘cannot be tenable for the wholesale sector to have significantly lower standards than the retail market in terms of qualifications, CPD and ethics’.
“The Minister may say that the varied nature of financial services and different needs of customers means that it is very hard to have a single qualification, but that is the case for doctors and lawyers.”