HL Deb 16 March 1987 vol 485 cc1210-1

2.45 p.m.

Lord Campbell of Croy

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 whether they intend that a self-regulatory organisation (SRO) will be established to supervise building societies.

Lord Beaverbrook

My Lords, if their application to become a designated agency under the Act is successful it will be for the Securities and Investments Board to recognise self-regulating organisations. An organisation can only be recognised if it satisfies the criteria for recognition set out in the Act.

Lord Campbell of Croy

My Lords, I am grateful to my noble friend for that reply. Is he aware that the Securities and Investments Board visualise that building societies should be with the Financial Intermediaries, Managers and Brokers Association, known as FIMBRA, whose present members are very different from building societies, and that FIMBRA at present apparently cannot recognise the scheme of regulation operated by the Building Societies Commission, therefore making it difficult if not impossible for a building society to join?

Lord Beaverbrook

My Lords, the bodies which intend to apply for recognition are expected to apply to regulate specified kinds of investment activity. The membership of most applicant SROs will therefore include different types of firms engaged in a similar sort of investment business. The building societies will only be required to register with an SRO in respect of investment business, not in respect of business as building societies.

Lord Williams of Elvel

My Lords, would the noble Lord not accept that the noble Lord, Lord Campbell, is entitled to a rather fuller reply to his Question, which raises an important point? If FIMBRA fails to meet the requirements of the SIB and therefore cannot become an SRO, is it not the case that the SIB have to do the job themselves—in other words, that there is a special SRO set up for the purpose by the SIB? Or will the SIB try to push building societies and others into another SRO? What is the Government's attitude to all this? There is a problem here to which the Government need to pay attention.

Lord Beaverbrook

My Lords, without commenting on the fullness of any reply or question, I expect businesses to prefer to obtain authorisation through membership of an SRO, but the alternative of direct authorisation by the SIB will of course be available.

Lord Campbell of Croy

My Lords, is my noble friend aware that that would be extremely unwieldy and would almost certainly lead to duplication and unnecessary expense; and that the building societies are in future likely to play a substantial part in financial services?

Lord Beaverbrook

My Lords, I understand that the SIB have indicated that the five SROs preparing to apply for recognition will form a satisfactory structure capable of providing for the whole range of investment business. They will be looking carefully at FIMBRA's rules and regulations once they come forward for approval.

Lord Elwyn-Jones

My Lords, in view of what passed in the recent debate on the English language, would not a little economy in the use of acronyms be a useful contribution to the proceedings of the House?

Lord Beaverbrook

My Lords, I am inclined to agree. However, having been accused of giving a rather short answer to my noble friend, perhaps I may say that I might have run the risk of giving a rather long answer if I had spelt out the full title of a number of these organisations.

Lord Campbell of Croy

My Lords, does my noble friend agree that in the case of the three acronyms used each has been spelt out, one in my Question, one by my noble friend and the other in full by me?

Lord Beaverbrook

Yes, my Lords; I am sure they have.