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Sants assumes control

Hector Sants was last week unveiled as the new FSA chief executive taking over at a time when a dramatic overhaul of the retail financial services landscape is top priority.

Sants will take control from Friday, with current chief executive John Tiner standing down after the FSA’s Annual Public Meeting on Thursday.

He had been favourite for the role ever since Tiner announced he was stepping down in January despite some worries he was not interested in the increased work load that would come with the position.

Many will be reassured by his industry background. He joined the regulator as managing director wholesale and institutional markets in May 2004 from Credit Suisse First Boston where he was chief executive officer of Europe, Middle East and Africa.

Other past experience includes time as a board member of the London Stock Exchange.

The obvious concern is a lack of experience regulating retail matters at a time when the FSA is so focused on a fundamental reform of the industry.

But the FSA says since Sants arrived at Canary Wharf he has been heavily involved in decisions affecting the retail industry, as a member of the regulator’s senior management team.

Aifa director general Chris Cummings says Sants has proved a “capable and pragmatic regulator” and that his appointment is a sign of continuity at the FSA.

Cummings says Aifa aims to ensure the new chief executive has a good understanding of the importance of the intermediary industry to the retail market in the context of the retail distribution review.

The Pensions Bill ping pongs back to the Commons on Tuesday with a row developing between the pensions campaigner Ros Altmann and the ABI over the issue of using unclaimed assets to boost Financial Assistance Scheme payments to those who lost out when their occupational schemes collapsed.

Altmann says the ABI is misleading MPs by claiming the amendments would take money out of other people’s pension funds or with-profit polices to pay for increases to FAS payouts.

She says the amendments do not specify the source of unclaimed assets to be used and that the ABI is conducting a campaign of misrepresentation as its members are worried about having to identify how much unclaimed assets they hold.

The ABI says it is simply making MPs aware of the nature of inherited estates, the fact they are different to general unclaimed assets and that it is not the Government’s money to redistribute.

The findings of the Young review, published today, appear to support some of the ABI’s arguments.

The report suggests defined benefit occupational schemes and orphan pension assets are not suitable for providing further FAS assistance and sources such as unclaimed personal pensions and life assurance policies “raise a number of complex legal and operational issues, and at present there is little evidence they might provide much additional funding”.
Similar amendments were narrowly defeated in Commons, by a majority of 22, in April before they were reinstated by the Lords.

Prime Minister Gordon Brown has hinted at further help for the victims to bring payouts towards the level of the Pension Protection Fund and we will find out tomorrow whether there are enough Labour backbenchers prepared to vote for the amendments and inflict an embarrassing early defeat on the PM.

Elsewhere there are reports of an early bust up between Brown and his Chancellor Alistair Darling over plans to change the tax rules on buy-to-let properties as part of Brown’s commitment to more affordable housing.

Brown is thought to be considering changes to remove some of the financial benefits enjoyed by landlords but Darling is against such a move. Of course the revelations could also be a nice piece of early spin painting Darling as an iron Chancellor standing up to his boss and Brown as a listening PM.


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