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7.45 pm
I confess to being rather dismayed by that last point. I am worried about the fact that the FSA does not consider the maintenance of the capacity to execute deals in the markets to be clearly one of its responsibilities. I accept that, as my hon. Friend the Minister has said, provisions in the Bill allow the FSA perhaps to include that in its remit, but the Bill does not seem to specify a duty, which is one of the purposes of the amendments.
Issuing the 9 December guidance that established priorities for those with nominee accounts, Lindsay Thomas, head of the Securities and Futures Authority's supervision department, said:
I am concerned about that. We are seeing the development of new markets; we are seeing the development of new traders in the market--consumers with small stocks of equities in which they wish to deal. It is, of course, possible that some of that may not be well advised. There is concern about people who are working on the margins, buying options rather than the shares themselves. However, the concern about whether consumers are well advised to engage in such trades provides no excuse for a lack of capacity in the market.
I urge Ministers to make it clear that the FSA will have a duty and responsibility to ensure that our British share markets can function in a modern, high-tech, e-commerce way, and will no longer be subjected to the delays experienced by small traders in the last months of 1999.
Mr. Flight:
Let me ask the Minister a question about investment exchanges. Under the Bill, they become semi- regulative bodies themselves and gain a legal immunity that, in the main, was not enjoyed before. What arrangements, if any, will be organised to deal with complaints about investment exchanges in relation to those
Mr. Timms:
I listened with interest to what was said by my hon. Friend the Member for Newcastle upon Tyne, Central. I share his concern: it is important for adequate facilities to be available for as many people as wish to participate in trades.
There has been a remarkable increase in recent months. That is a welcome development. The more people who take part in such trading, the better. Of course they must take adequate advice and precautions, but we want more people to participate, and that is clearly happening.
My hon. Friend is right to draw attention to the growth of on-line share brokering. He has made the point that things have gone a good deal further in the United States than they have here. That is true, but I have no doubt that there will be rapid developments on that front in the UK as well; it is happening across the board in on-line services. That sector will be no exception.
It is clear from the letter that my hon. Friend read from Howard Davies that the FSA will take a general and close interest in what is happening to ensure that arrangements are working well and that provision is adequate, but if there is demand for a particular type of service, we will want the market to respond to that demand. I do not think that it is for the Bill or the FSA to require that the market should respond. I am not quite sure what mechanism it could adopt to require that.
Therefore, the arrangements in the Bill are the right ones. They allow for both my hon. Friend's points to be dealt with through the provisions that are already in place, but I am not sure that it will be possible for the FSA to take the rather more prescriptive role that he outlined, although it will take a close interest in how things develop. In that sector, notwithstanding the difficulties with capacity that have arisen in recent months, we can expect the market to move pretty quickly and ensure that there is adequate capacity for the attractive commercial opportunities that growth is presenting.
The hon. Member for Arundel and South Downs (Mr. Flight) asked about arrangements for complaints. The Bill requires the FSA to maintain arrangements for dealing with complaints against recognised bodies; it is in clause 275. The draft recognition requirements that were published for consultation last year also require the recognised bodies to maintain complaints arrangements. Those are the provisions that have been made. I hope that that covers his point.
Amendment agreed to.
Amendment made: No. 137, in page 132, line 38, leave out from "house" to "in", in line 39 and insert--
Miss Melanie Johnson:
I beg to move amendment No. 144, in page 148, line 21, leave out from "and" to end of line 23 and insert--
Mr. Deputy Speaker:
With this it will be convenient to discuss Government amendments Nos. 145 and 154.
Miss Johnson:
These are drafting amendments and follow on from the amendments to clause 260. They bring the definitions into line with those for domestic recognised investment exchanges and recognised clearing houses in clause 260.
Amendment No. 154 defines an exempt person as any person who has been granted exemption under an exemption order made under clause 34, as the appointed representative of an authorised person under clause 35, or who has been recognised as an investment exchange or a clearing house.
Amendment agreed to.
Amendment made: No. 145, in page 148, line 26, leave out from "and" to end of line 27 and insert--
Miss Melanie Johnson:
I beg to move amendment No. 146, in page 162, line 29, leave out from beginning to "may" and insert--
"It is important that firms put in place systems adequate to handle the new peak levels of business that they should now expect."
That implies that Lindsay Thomas envisages some duty for the SFA to deliver in that regard. Howard Davies's later correspondence with me appears to water that down.
"in relation to which a recognition order is".--[Miss Melanie Johnson.]
Amendments made: No. 138, in page 137, line 30, at end insert--
"( ) Subsections (3) to (5) apply to a direction given under subsection (1).".
No. 139, in page 137, line 42, leave out subsection (6).--[Miss Melanie Johnson.]
Amendment made: No. 140, in page 140, line 7, at end insert "or (4)(b)".--[Miss Melanie Johnson.]
Amendment made: No. 141, in page 144, line 20, leave out "contained in an annual" and insert "the subject of a".--[Miss Melanie Johnson.]
Amendments made: No. 142, in page 145, line 41, leave out "punish" and insert "deal with".
No. 143, in page 145, line 42, leave out from "he" to end of line and insert "were in contempt".--[Miss Melanie Johnson.]
"in relation to which a recognition order is in force".
"in relation to which a recognition order is in force".--[Miss Melanie Johnson.]
Amendments made: No. 330, in page 150, line 37, leave out "("the effective date")".
No. 331, in page 150, line 38, at end insert--
"( ) A direction under subsection (1) must be published in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
( ) The Authority may charge a reasonable fee for providing a person with a copy of the direction.
( ) The Authority must, without delay, give the Treasury a copy of any direction which it gives under this section.".--[Miss Melanie Johnson.]
Amendment made: No. 332, in page 151, line 20, at end insert--
"( ) A direction under subsection (1) must be published in the way appearing to the Authority to be best calculated to bring it to the attention of the public.
( ) The Authority may charge a reasonable fee for providing a person with a copy of the direction.
( ) The Authority must, without delay, give the Treasury a copy of any direction which it gives under this section.".--[Miss Melanie Johnson.]
Amendments made: No. 333, in page 151, line 21, leave out
"If the Authority proposes to give"
and insert "Before giving".
No. 334, in page 151, line 22, leave out "it" and insert "the Authority".
No. 335, in page 151, line 24, leave out from beginning to "and", in line 25, and insert "a cost benefit analysis".
No. 336, in page 151, line 26, leave out "a statement" and insert "notice".
No. 337, in page 151, line 27, leave out "reasonable" and insert "specified".
No. 338, in page 151, line 30, leave out from "publish" to end of line 31 and insert--
"an account, in general terms, of".
No. 339, in page 151, line 37, leave out "publish a statement" and insert--
"(in addition to complying with subsection (4)) publish details".
No. 340, in page 151, line 38, leave out "the statement" and insert "those details".
No. 341, in page 151, line 42, leave out from beginning to "of" in line 4 on page 152 and insert--
"( ) Neither subsection (2)(a) nor subsection (5)(b) applies if the Authority considers--
(a) that, making the appropriate comparison, there will be no increase in costs; or
(b) that, making that comparison, there will be an increase in costs but the increase will be".
No. 342, in page 152, line 10, at end insert--
"( ) "Cost benefit analysis" means an estimate of the costs together with an analysis of the benefits that will arise--
(a) if the proposed direction is given; or
(b) if subsection (5)(b) applies, from the direction that has been given.
( ) "The appropriate comparison" means--
(a) in relation to subsection (2)(a), a comparison between the overall position if the direction is given and the overall position if it is not given;
(b) in relation to subsection (5)(b), a comparison between the overall position after the giving of the direction and the overall position before it was given.".--[Miss Melanie Johnson.]
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