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In June 2009 we published our Seventh Report of the 2008-09 Session, Local authority investments. The Report followed an inquiry into the practices of local authorities in the management of the considerable sums of money which they hold as cash reserves.
In that Report we commented on the role of the Financial Services Authority (FSA) in the regulation of treasury management advisers, the private sector companies which offer local authorities advice on their treasury management functions. We recommended that the FSA take a more active role in the regulation of such advisers.
The FSA's response to our report clarified the current legislative position in respect of the regulation of treasury management advisers. Following further correspondence with the FSA, we have concluded that legislative change is necessary to ensure that those advisers are effectively regulated, and we recommend that such change be made.
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