§ Mr. JanmanTo ask the Secretary of State for Trade and Industry whether he proposes to address the concerns expressed about the uncertainty of how the statutory regulations made under the Financial Services Act 1986, and the rules made by the self-regulating organisations and professional bodies recognised under that Act, interact with the common law duties of those carrying on investment business.
§ Mr. RedwoodI recognise the concerns which have been expressed on this matter and the complexity of the issues involved. I have therefore made a reference to each of the Law Commission and the Scottish Law Commission in the following terms
Certain professional and business activities are subject to public law regulation by statutory or self-regulatory control. The Law Commission/Scottish Law Commission is to consider the principles which should govern the effect of such controls on the fiduciary and analogous duties of those carrying on such activities, and to make recommendations. The inquiry will consider examples from differing areas of activity but will be with particular reference to financial services".The general issue of the inter-relationship of fiduciary duties arising under the common law on the one hand, and statutory and self-regulatory rules on the other, arises in relation to a variety of activities. Fiduciary duties relating to matters such as disclosure of information to clients, liability to account, for example, for commissions, and conflicts of interest, can apply in areas such as estate agency and insurance brokerage as well as in the financial services area.
I have therefore asked the two Law Commissions not to restrict themselves to examining the financial services area, but to consider the issue, and make whatever recommendations they feel appropriate, in the wider context.