§ Mr. Teddy TaylorTo ask the Secretary of State for Trade and Industry what is the purpose of the European Economic Community directive on capital adequacy;296W what will be the impact of the directive on the Financial Services Act; whether he has made any assessment of the impact of the directive on independent financial advisers in the United Kingdom; and if he will make a statement.
§ Mr. RidleyThe proposed EC directive on the capital adequacy of investment business is at an early stage and no draft has yet been presented to the Council of Ministers. It will set out the capital requirements with which those doing investment business must comply. It complements the investment services directive, which will allow an investment firm authorised in one member state to do business throughout the Community without the need for further authorisation.
Implementation of the provisions of the directive, once adopted, is likely to involve changes to the relevant rules of the Securities and Investments Board and the self-regulatory organisations and changes to the Bank of England's supervision of banks.
I am aware of the concern among independent financial advisers that the directive should take account of the way financial services business is done in the United Kingdom. We have made our position clear to the Commission on the aspects of the proposals which are of special concern to this group.