§ Mr. BurnsTo ask the Chancellor of the Exchequer if he will make a statement about the Personal Investment Authority.
§ Mr. NelsonThe Securities and Investments Board is today announcing that it has decided to recognise the Personal Investment Authority as a self-regulating organisation, and as a self-regulating organisation for friendly societies under the Financial Services Act 1986.
The Treasury has given SIB leave under the FSA to recognise the PIA. That decision was reached after receiving two reports from the Director General of Fair Trading. Both reports concluded that the rules and guidance submitted by the PIA do not, and are not intended nor are likely to have, significantly anti-competitive effects. Having considered the DGFT's report, I have 209W concluded that there is no impediment to the Treasury giving the leave sought by SIB. The DTI and the Friendly Societies Commission, as the prudential regulators for insurance companies and friendly societies respectively, have also certified that they are satisfied that the PIA may be recognised.
The PIA will regulate and supervise all types of retail financial services business covered by the FSA. This includes selling of life insurance and regulated collective investment schemes as well as independent financial advice. The PIA will aim for high standards of regulatory compliance so as to improve investor protection. It will start work as a regulator on 18 July.
SIB is today also giving notice of the revocation of recognition of two existing regulators, the Financial Intermediaries Managers and Brokers Regulatory Association, and the Life Assurance and Unit Trust Regulatory Organisation. The PIA will cover the parts of business which those SROs now regulate and SIB has concluded that it is undesirable for those SROs to continue to operate now that the PIA is to be recognised.