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Financial Services Bill

My Lords, it will be appreciated that this Bill has been the subject of considerable discussion and the government amendments reflect the discussions that we have been able to enjoy with the opposition. These issues have also been the subject of considerable consideration elsewhere. Amendments 38 and 39 require the FSA, when discharging its general functions, to have regard to the desirability of enhancing public knowledge and understanding of financial matters, including the financial system. The amendments place a new obligation on the FSA that complements the education body’s remit to lead the financial education agenda. This outcome-focused provision also complements the more operational requirement in Part 1 of the new Schedule 1A to the FSMA to ensure that the new body is capable of exercising its consumer financial education function. It also provides a clearer framework for collaboration between the body and the FSA. Amendment 40 requires the FSA, when discharging its consumer protection regulation objective, to have regard to information provided by the education body to the FSA as part of the consumer financial education function. This expands on the FSA’s obligations to protect consumers, set out in Section 5(2) of the FSMA, whereby it must already consider the differing degrees of risk to consumers of various kinds of financial transaction, and consumers’ information and advice needs. Along with Amendments 36 to 39, this will further strengthen the framework for collaboration between the FSA and the new body. Amendment 59 will ensure an independent board that is made up of suitably qualified and informed individuals, while avoiding any unintended constraints on the board’s composition. It allows sufficient flexibility for a variety of different people to be appointed to the board. The government amendments include authorised persons, those who represent the interests of consumers and those with knowledge of education. Amendment 68A and 68B require that the consumer education body must specify in the annual plan how it will measure the success of its objectives, including both annual and long-term objectives. This is a response to concerns raised in debate and in discussions with stakeholders. Amendments 75 to 77 and 80 provide for fees to be collected by the FSA from firms authorised by the FSA under the Financial Services and Markets Act 2000. However, payment service providers are regulated by the FSA under the Payment Services Regulations 2009. As such, the Bill does not give the FSA the power to levy these firms to contribute towards the costs of the consumer education body. These are therefore technical amendments that are designed to correct this minor lacuna in the Bill. I beg to move.