§ Ms LawrenceTo ask the Chancellor of the Exchequer what responses he has received to the draft Financial Services and Markets Bill; and if he will make a statement. [66812]
§ Ms HewittThe response to publication of the draft Bill in July 1998 showed strong support for the creation of a single statutory regulator. There is widespread interest in ensuring that the Financial Services Authority continues to operate a fair, open and accountable manner. The Government intend to clarify and, where necessary, to amend the Bill to meet valid concerns raised on consultation and in response to the current inquiry by the Treasury Committee and the intended pre-legislative scrutiny by a Joint Committee of both Houses.
In the meantime, we have decided to strengthen further the openness and accountability of the new regulatory regime. We intend to include in the Bill a statutory requirement for the FSA to establish practitioner and consumer panels, underpinning the arrangements the FSA has already put in place. We also intend to include in the Bill a requirement for the FSA to hold an annual open meeting at which the Chairman and others can be questioned on the FSA's policy and performance. The Bill will also include a requirement that the non-executive members should form a majority on the FSA Board.
The statutory requirements in the draft Bill for the FSA to consult on rules will be improved and will include a requirement that proposed rules and rule changes be accompanied by an explanation of how they relate to the FSA's objectives. The consultation requirements will also be extended so as to apply to standing guidance of general application.
396WThe draft Bill requires the FSA to have in place arrangements for independent investigation of complaints. The FSA will be required under the Bill to consult on these arrangements. We also intend that in addition to publishing the conclusions of his investigation the investigator should be able to report on the FSA's response to any recommendations made.
The FSA will be accountable to Ministers and through them to Parliament. Its annual report under the Bill will be a key aspect of that accountability. The draft Bill enables the Treasury to require the FSA to report on specific matters. We will begin discussions with the FSA with a view to publishing an agreed list of matters to be covered in the report. We also intend that the Treasury should be given new powers to commission and publish periodic independent value for money audits of the FSA.
The draft Bill provides the Treasury with a number of powers to make statutory instruments. Drafts of key orders will be published for public consultation shortly. We will also undertake appropriate consultation on the other orders.