COMMONS AMENDMENTS (Hansard, 13 November 1989)

§ Lord Strathclyde
My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 300 and 302 en bloc. With permission, I should also like to speak to Amendment No. 304.
The amendments bring together four clauses which deal with certain changes to the Financial Services Act relating to listing particulars and prospectuses.
Amendment No. 300 amends Section 150 of the Financial Services Act. That section provides inter alia that those responsible for listing particulars are liable to pay compensation to anyone suffering a loss as a result of the omission from the particulars of information which should have been included or of the failure to disclose significant changes occurring from publication of the listing particulars and the commencement of dealings.
Section 150(6) makes it clear that no liability arises if the person responsible for the particulars was either not required to disclose the information in question or was entitled to omit it by virtue of Section 148.

§ Lord Peston
My Lords, I am a little taken aback. Is the noble Lord going to say something about Amemdment No. 304?

§ Lord Strathclyde
My Lords, I am sorry if I did not mention Amendment No. 304. The amendment gives effect to a decision announced in the Budget to unify the separate regulatory regimes for sterling commercial paper—currently less than one year maturity — and short-term corporate bonds — one to five years' maturity— as part of a package of measures further to deregulate the sterling capital market. The securities concerned have a minimum denomination of £100,000 and are aimed at professional investors. I hope that that clears the matter up. I apologise for not having said that in my opening remarks.

§ Lord Peston
My Lords, I thank the noble Lord for that explanation. I raised the question because while the other amendments which he moved seem unexceptionable, Amendment No. 304 requires a moment's reflection, particularly as it was not debated in Committee in the other place.
I am aware that the Minister's right honourable friend the Chancellor of the Exchequer warned in his Budget Speech that he would move in that direction. Since it is rather drastic to substitute five years for one year in order to unify what the Chancellor called the short-term corporate bond and sterling commercial paper markets, I should like to ask the Minister two questions. First, since the Budget have there been any further studies of the subject, either by the Treasury, the Bank of England or his Lordship's own department? Secondly, and more importantly, since it is a significant move —although not necessarily an erroneous move —will the relevant government departments be keeping a close eye on 1110 what happens with a view to seeing that nothing goes wrong?
For myself, I should go a long way to avoid being involved in a five-year debenture. If the market has any sense, I assume that it will take the same view. However, setting that point on one side, it is not a trivial matter and is one which we cannot allow to go by. I therefore should like an assurance from the noble Lord that the Government will look at this as carefully as possible as the market evolves to ensure appropriate protection.

§ Lord Strathclyde
My Lords, of course it is not a trivial matter. Although no studies are currently being carried out, the Government do not legislate on such matters without keeping an eye on developments. We shall make sure that the market develops in the way that we should like.