§ Mr. Campbell-SavoursTo ask the Chancellor of the Exchequer on what dates discussions took place between Treasury officials and Japanese officials on the incidence of off-exchange dealings in derivatives in Japan by non-Japanese nationals in the last two years.
§ Mr. NelsonJapanese, United Kingdom and United States securities markets regulators met in Tokyo on 22 April 1994 in one of a series of trilateral meetings to discuss co-operation and regulatory issues in financial services. One of the issues discussed was the over-the-counter derivatives business. It was agreed to co-operate on a trilateral basis in further study.
§ Mr. Nicholas WintertonTo ask the Chancellor of the Exchequer what information he has about the value of pensions business currently handled by United Kingdom building societies; what information he has concerning the extent to which such societies are trading in derivatives; what steps he is taking in the light of the Baring affair to issue guidance to such derivative-trading building societies; and if he will make a statement.
§ Mr. Nelson[holding answer 9 March 1995]: The volume of pensions business handled by building societies is very small both in relation to the size of their operations overall, and to the total volume of pensions in the United Kingdom. Under the Building Societies Act 1986, societies may use a limited range of derivatives, but only for the reduction of risk arising from changes in interest rates, currency rates or other prescribed factors. They do not have the power to trade or speculate in derivatives. The Building Societies Commission has issued prudential guidance on the use of derivatives. The commission keeps its prudential guidance under review. If further guidance is needed in the wake of recent events at Barings, the commission will provide it.
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§ Mr. Nicholas WintertonTo ask the Chancellor of the Exchequer what steps are being taken by the Building Societies Commission to ensure that building societies do not become involved in derivatives trading; and if he will make a statement.
§ Mr. Nelson[holding answer 9 March 1995]: Building Societies may enter into only a restricted range of derivative contracts, solely for the purpose of reducing loss. They do not have the power to trade or speculate in derivatives.