Financial Services Bill

Memorandum submitted by Fidelity Worldwide Investment (FS 06)

Fidelity is a global asset management business. We operate in fifteen countries in Europe and a further nine in India and the Far East. Our UK business is a substantial component of our overall business. We manage £24 billion in the UK for private investors, pension funds and insurance companies.

Fidelity is strongly supportive of any measures which strengthen the position of consumers in the financial services market and therefore supports the underlying direction of the Financial Services Bill as it relates to retail consumers.

There is one overarching issue which we would wish to draw to your attention. This is the fact that nowhere in any of the objectives for the new regulatory bodies is there any mention of having regard to the international competitiveness of the UK’s financial services industry.

The Treasury clearly has a belief that international competitiveness is a euphemism for light touch regulation. We do not believe that is so. FIL operates with regulators globally and a number can produce appropriate and tough regulations and supervision which protects investors but also does minimal damage to their country’s competitive position. There must also be a strong possibility that failure to consider the international context would be more likely to lead to poorer, inward-looking regulation.

It seems to us that it would be helpful to add to the current Bill a further operational objective, for the FCA at least, which might sit as an addition to Part 1A, Chapter 1, Clause 1B (3).

(d) the international competitiveness objective

This should be followed by a new 1F (subsequent clauses to be renumbered).

1F The international competitiveness objective

The international competitiveness objective is: maintaining the competitive nature of the United Kingdom in respect of financial services and markets having regard to best practice in international regulation and supervision.

February 2012