Written question asked by Jim Cunningham (Labour) on Tuesday, 29 November 2005, in the House of Commons. It was due for an answer on Tuesday, 6 December 2005. It was answered by Ivan Lewis (Labour) on Tuesday, 6 December 2005 on behalf of the Treasury.

Unregulated Products

Question: To ask the Chancellor of the Exchequer what plans his Department has (a) to protect consumers from unregulated products sold by banks and (b) to ensure that consumers are made fully aware of which products are regulated and which are not; and if he will make a statement.

Answer: The Financial Services Authority (FSA) regulates all banks and financial services providers operating in the UK. The FSA has a statutory obligation to protect consumers and is responsible for policing the regulatory perimeter and for drawing attention to where the boundary lies. FSA rules require banks to explain to customers that a particular product or service is regulated by the FSA.The FSA Handbook includes requirements that firms must ensure that they should not make any misleading statements to a client, whether expressly or by implication, that its affairs, or any aspect of them, have the approval of the FSA. This does not, of course, prevent firms from indicating that they are authorised and regulated by the FSA, in conjunction with selling products regulated by the FSA.In addition to FSA regulation, the Banking Code is a voluntary code which applies to the large number of banks that subscribe to it. It covers some regulated services, such as deposit-taking, and some unregulated services, such as foreign exchange services. The existence of the Banking Code is one of the reasons why the FSA has not introduced significant additional conduct of business regulation except where required by European legislation.

Secondary information

Type: Written question
Reference: 440 c1131-2W;440 c1131-2W; 33852
Session: 2005-06
Subjects: Codes of practice Consumers Banks Financial services Financial Services Authority Protection Regulation
Link: View this Written question on www.publications.parliament.uk