The Investment Management Association has expressed some reservations over the Joint Committee on the Draft Financial Services Bill’s report.
In the report, which was published today, the Joint Committee calls on the Government to amend the Draft Financial Services Bill to prevent a repeat of the recent financial crisis.
Among the committee’s suggested changes are greater clarity on the objectives of the three new financial regulators, more accountability for the Bank of England and increased emphasis on “judgement-led” regulation.
Richard Saunders, the chief executive of the IMA, welcomes some elements of the report.
Saunders highlights the committee’s recognition that the Financial Conduct Authority and the Prudential Regulatory Authority have to cooperate to deal with European regulation and the call for the recommendations of the Independent Commission on Banking to be implemented early as positives.
However, he adds: “While the committee has recommended enhancing the FCA’s objectives to give it the task of ensuring that all participants benefit from better functioning financial markets, we remain disappointed that the FCA has not been given a remit to promote competitiveness.”
The commentator also notes that the committee has not questioned the “sweeping power” of the PRA to veto the FCA’s decisions, which he argues will mean stability is always prioritised over consumer protection.
Furthermore, Saunders says that the IMA continues to stand by its position that asset managers should remain under the remit of the FCA, despite the committee calling for the PRA to regulate this area.