SIB told to introduce fear into financial policing
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Your support makes all the difference.THE TREASURY wants the Securities and Investments Board to 'introduce more fear' into the system for policing financial services firms, Anthony Nelson, Economic Secretary to the Treasury, told the all-party Treasury committee of MPs last night.
But while he made it clear that the SIB should become more incisive, Mr Nelson said it could be done within the existing framework without introducing new primary legislation.
This is what he hoped would emerge from the review of regulation by Andrew Large, head of the SIB, who is to report his views to the Chancellor in March.
Mr Nelson called the 1986 Financial Services Act a 'convoluted fudge', but said he would rather have good people running an imperfect system than a perfect structure inadequately supported and staffed.
The SIB could be more preemptive, which was 'as much a matter of attitude as of utilising the provisions of the law.'
Action could be taken through 'co-ordination and initiative.' There were cases where powers of prosecution could be used more effectively and frequently and in a number of cases they could be used to 'inject a little more fear into the system, fear in which I am a great believer,' he said.
Mr Nelson backed a further streamlining of the regulatory structure, including the merger of Fimbra, the financial intermediaries regulator, and Lautro, the life assurance regulator, into a Personal Investment Authority.
He defended the SIB's right to dictate the terms under which the PIA would be accepted as a regulator, but refused to comment directly on a controversial letter that Mr Large sent recently on this subject to Sir Gordon Downey, chairman of the PIA.
He appeared to hint that the Securities and Futures Authority and Imro, the investment managers' regulator, may merge.
Fimbra levied fines totalling just over pounds 200,000 against 127 of its member firms last year. It said it has expelled 817 firms since the current investor protection system began in 1988. Its work has led to 53 criminal investigations.
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