A Treasury select committee member has raised concerns with the FSA over a new breed of structured product emerging in the marketplace.
Liberal Democrat MP Norman Lamb wants the FSA to pay close attention to structured capital at risk products, a high-income bond derivative.
He has written to FSA chief executive John Tiner demanding more information on companies being investigated over structured product sales and asks if these firms are marketing new product variants.
At a recent select committee session, Tiner said the FSA is looking closely at fewer than 10 firms on structured product marketing.
Lamb says as soon as the FSA tries to crack down on one range of products, a deviation of them springs up elsewhere. He wants to see the FSA pre-vetting product literature for higher-risk products more actively.
He says: “Surely it is better to stop those statements going out rather than to act only after the event?” He is calling for this strategy to be employed whenever the FSA is particularly concerned about a range of products.
Lamb says: “The fact that there is activity in this new product area indicates to me that there is a continuing problem that needs to be tackled.”