§ Mr. ColvinTo ask the Chancellor of the Exchequer what discussions he has had with the Securities and Investments Board and the Personal Investment Authority concerning the impact of regulatory costs on the competitive edge of retail financial services and on the creation, continuity and expansion of small firms which offer independent financial advice.
§ Mr. NelsonIn order to give the Securities and Investments Board leave to recognise the Personal Investment Authority as a self-regulatory organisation, the Financial Services Act required the Treasury to consider whether the PIA's rules, regulations, statements of principle and codes of practice had, or were intended or likely to have, the effect of restricting, distorting or preventing competition to any significant extent. I refer the hon. Member to my reply to the hon. Member for Chelmsford (Mr. Burns) on 22 June at columns208–9 on that point.
In addition, the Securities and Investments Board is required by the Act to have satisfactory arrangements for taking account of the cost of complying with statements of principle, rules regulations and codes of practice which it proposes to make. The review of the role and functions of the board, "Making the Two Tier System Work", published in May 1993, extends this commitment to oversight of the cost effectiveness of the whole system of financial regulation under the Act. SIB intends shortly to set up a cost of compliance unit.
My right hon. and learned Friend the Chancellor meets the chairman of SIB from time to time to discuss these and other matters. I have no hesitation in confirming the Government's appreciation of the value of independent financial advice.