HC Deb 26 May 1988 vol 134 cc243-4W
Mr. McCrindle

To ask the Chancellor of the Duchy of Lancaster what progress has been made in requiring company representatives and tied agents to disclose remuneration following his decision to require LAUTRO to require full disclosure of commission by intermediaries.

Mr. Maude

It is for the Securities and Investments Board and the self-regulating organisations to draw up rules on investment business under the Financial Services Act, but I am confident that, in the period before automatic full disclosure of commissions by intermediaries is required, they will work to develop a system of disclosure of expenses of selling through company representatives.

The Secretary of State's decision on LAUTRO was whether or not to give leave to its recognition by the board. LAUTRO amended its rules so as to require full disclosure of commissions from January 1 1990. The Secretary of State concluded that, as amended, LAUTRO's rules were not significantly anti-competitive, and accordingly gave leave.

Mr. McCrindle

To ask the Chancellor of the Duchy of Lancaster when he received a copy of the report by Peat Marwick, commissioned by the Securities and Investments Board on the disclosure of remuneration and expenses of company representatives and tied agents; whether he has met the chairman of the Securities and Investments Board to discuss its recommendations; and if he will make a statement.

Mr. Maude

I received a copy of this report when it was published by the Securities and Investments Board on May 17 1988, and expect to discuss it with the chairman of the board shortly.

Mr. McCrindle

To ask the Chancellor of the Duchy of Lancaster what estimate he has made of the number of intermediaries who will, as a result of his decision on the LAUTRO rules regarding commission disclosure, apply to become tied agents; and if he will make a statement.

Mr. Maude

I have made no estimate. It is for intermediaries themselves to decide whether to be independent or to become tied agents.

Mr. McCrindle

To ask the Chancellor of the Duchy of Lancaster if it remains his policy to ensure equivalence of disclosure of remuneration by independent intermediaries and company representatives; what form will this take; and if he will make a statement as to when he expects the full details to be known.

Mr. Maude

Under the rules made under the Financial Services Act, independent intermediaries will be required to disclose fully their commission to all investors from January 1 1990. The regulatory bodies under the Act will use the intervening period to prepare the way for disclosure of expenses of selling through company representatives.