Labour has tabled a series of amendments to the Financial Services Bill that would place new requirements on firms, investors and the incoming financial regulators.
Set to be published later this morning, if selected for debate by the Speaker, the proposed amendments will be be debated in Monday’s third reading of the bill. They were put forward by Shadow Treasury financial secretary Chris Leslie and Shadow Treasury economic secretary Cathy Jamieson.
One amendment would see firms, when it is “appropriate”, having to meet a fiduciary duty toward clients. The FCA would need to ensure consumers, and particularly those on low incomes, have access to financial services and products which are “affordable and appropriate”.
The amendments would see the Prudential Regulation Authority and the Financial Conduct Authority forced to publish cost comparisons for their administration versus estimates for the same work if it was carried out by the FSA. They would also be required to try and minimise costs resulting from having two regulators rather than one. Labour also wants the FCA to be required to publish minutes from its meetings.
Leslie and Jamieson want the Money Advice Service to provide “targeted, proactive and easily accessible advice to those encountering economic disadvantage, financial exclusion of financial exploitation”.
A series of amendments targeted at shareholder responsibility would require the FCA to introduce “stewardship rules” to improve the quality of stewardship of institutional investors. An employee representative would have to sit on firms’ remuneration committees while shareholders would be made responsible for appointing any remuneration consultants. Another amendment would require the Chancellor to bring forward plans for institutional investors to publish information on the exercise of voting rights in regard to listed firms.
Last month, the all-party Parliamentary group for insurance and financial services chairman Jonathan Evans called on the Government to set out how it would deliver on the coalition agreement pledge to foster diversity and promote mutuals in financial services. Labour wants to give the Treasury a six-month deadline to come up with that plan.
Labour also wants a review, after one year, of the co-ordination between the UK’s ’twin peak’ regulatory structure and the sectoral approach taken by Europe through the markets, banking and insurance European Supervisory Authorities.