HL Deb 21 November 1985 vol 468 cc658-9

3.22 p.m.

Lord Bruce of Donington

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what advice they have given to self-regulating organisations proposed for incorporation in the new regulating structure for the City of London, as to the qualifications and requirements governing admission to membership of overseas applicants or domestic applicants under direct or indirect overseas control.

The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth)

My Lords, the forthcoming Financial Services Bill will propose, for the first time, that all who do investment business should be authorised as "fit and proper" to undertake that business. Membership of a recognised self-regulating organisation will provide authorisation, but those self-regulating organisations will be recognised only if their rules secure that all their members (overseas and domestic) are fit and proper persons.

Lord Bruce of Donington

My Lords, I am most grateful to the noble Lord for his reply. Will he make it quite clear that what he has said this afternoon is, in fact, retrospective, and that all members of the SROs, as on the date when the Bill comes into operation, will be required to conform with the standards that are, in effect, laid down in the Bill itself? Is he satisfied that the existing investigatory resources in the possession of the present SROs are adequate for the purpose of determining the matters which are referred to in the Question?

Lord Lucas of Chilworth

My Lords, in essence I should like to say yes, but I think the noble Lord will recognise that no invitations have yet been issued for self-regulatory organisations to register. This will of course come about when the Bill is published at the end of this year. But certainly I am grateful to the noble Lord for his Question this afternoon, because any self-regulatory organisation so applying will have to ensure that its rules conform with the proposed legislation, and that membership is sufficiently controlled to meet the requirements that will be set down in the proposed legislation, to which I hope your Lordships' House and the other place will agree in due course.

Lord Paget of Northampton

My Lords, is not this essentially the platonic problem—who guards the guardian? Who decides whether these are proper persons and whether they are continuing to be proper persons? Is this a sort of vetting of a jurisdiction while it is in operation?

Lord Lucas of Chilworth

My Lords, I am sure the noble Lord will agree that I cannot pre-judge the outcome of the proposed legislation. But the principle in this is that the self-regulation will be within a statutory framework and therefore enforceable.

Lord Bruce of Donington

My Lords, is the noble Lord prepared to consider representations as to the nature and extent of the investigations that ought to be carried out in order to achieve this purpose?

Lord Lucas of Chilworth

My Lords, at this stage I can assure your Lordships' House that we are well prepared to receive any representations about any point that might be part of the measure that we envisage.