HC Deb 10 December 1998 vol 322 cc471-2
7. Mr. David Chaytor (Bury, North)

What plans he has to improve the system of regulation of stockbrokers. [61751]

The Chief Secretary to the Treasury (Mr. Stephen Byers)

Soon after coming to office last May, the Government announced their plans to modernise the system of regulation for the financial services industry generally. A single body, the Financial Services Authority, has been established, which will be given statutory powers in the financial services and markets Bill which we will bring forward later in this Session.

Mr. Chaytor

I thank my right hon. Friend for that reply. One of my constituents, a characteristic small investor, is in dispute with a reputable firm of stockbrokers—I shall resist the temptation to name the firm—to the tune of some £200,000. That sum is in dispute because of incompetence, following an insider deal that went wrong, and the firm is now under investigation for insider dealing. Does my right hon. Friend agree that the exploitation of small investors by stockbrokers, following the mis-selling of personal pensions and the mis-selling of additional voluntary contributions, is the third great financial services scandal of the Tory years? Will he assure the House that the Financial Services Authority will pay particular attention to the protection of small investors?

Mr. Byers

I sympathise with the difficulties that my hon. Friend's constituent has experienced. For the reasons that he has outlined, we felt that it was necessary to bring together the nine existing regulators into one body to regulate the financial services market. That body will have a single compensation scheme, which will help individuals who may have been subject to harmful treatment by stockbrokers or others involved in the financial services market. The aim of the new regime is to ensure that no individual, such as my hon. Friend's constituent, ever again has to suffer as a result of inappropriate conduct by people in the financial services market.

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