§ Mr. GardinerTo ask the Chancellor of the Exchequer (1) what discussions he has had with business organisations about the impact the European Investment Services Directive will have on their companies, with specific reference to the impact that the end of execution-only sales will have; [145706]
(2) what assessment he has made of how the European Investment Services Directive and the end of execution-only sales will affect (a) banks, (b) internet companies, (c) consumers and (d) the City of London. [145709]
§ Ruth KellyThe Government were disappointed with the position adopted by the European Council of Ministers on the proposed new Investment Services Directive. We believe that in several areas the Council text misses opportunities to create a competitive, integrated European financial market and instead will harm competition.
An area of particular concern for the Government during negotiations was the treatment of "execution-only" business in the Directive. We believe that it is important to ensure that execution-only business is not compromised by unnecessary regulation. Such business can provide low-cost access to share trading, for example, for a wider range of investors.
During negotiations, the Government successfully ensured that execution-only business will be exempt from full "suitability testing" obligations.
The Government will work hard with the Financial Services Authority to ensure that the provision relating to execution-only business is not implemented in the UK in a way which restricts normal marketing activity or direct offer promotions.
The Investment Services Directive is one of the topics discussed when Treasury Ministers meet members of the financial services industry.
350WAt official level, the Treasury has frequent contact with representatives of financial services businesses, trade associations and consumer groups. Recent contacts have involved discussions of the potential impact of the Directive on activities including on execution-only sales of financial instruments.