§ Mr. BurnsTo ask the Chancellor of the Exchequer if he will make a statement on the transfer of responsibility for financial services from the Department of Trade and Industry to the Treasury.
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§ Mr. LamontResponsibility for financial services was transferred to the Treasury on 7 June by the Transfer of Functions (Financial Services) Order 1992 which was laid before Parliament on 5 June.
The transfer involves the functions and staff of the DTI's financial services division. In essence, these cover responsibility for policy and legislation, and overseeing regulation, in the areas of investment business, collective investment schemes, the issue of securities to the public and investor protection.
The functions transferred include responsibility for the regulatory system under the Financial Services Act 1986 and oversight of the Securities and Investments Board, the Companies Securities (Insider Dealing) Act 1985, and part VII—(financial markets and insolvency)—and part IX—TAURUS—of the Companies Act 1989; EC directives in the financial services sector, (including the draft investment services and capital adequacy directives); arrangements with overseas regulators for exchanging information; encouraging international liberalisation in financial services through the general agreement on tariffs and trade and the organisation for economic co-operation and development; and for litigation to recover the cost of the Government's ex gratia payments scheme to Barlow Clowes investors.
The DTI will continue to be responsible for the generality of company law; insolvency matters including the disqualification of directors; investigations and prosecutions under the Financial Services, Insolvency and Companies Acts; and for prudential supervision of insurance undertakings, EC insurance directives, insurance interests in the OECD and GATT, and for general questions affecting the insurance industry.
Banking and financial services have become increasingly closely linked, at home and abroad, and this will now be reflected by bringing policy responsibility together in a single Department. No changes are proposed in the way financial services are regulated as a result of the transfer.