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Undertakings for Collective Investment in Transferable Securities Regulations 2011

My Lords, I am continually surprised by things that come up in this House that I was not expecting but, on a totally non-contentious piece of European legislation, I am surprised that the noble Lord, Lord Eatwell, pronounces that such horrific things are allegedly to happen. For the benefit of noble Lords, perhaps I should explain that the statutory instrument implements an EU directive which is concerned with the sale of collective savings products. It is the third amendment to a directive that dates back to the late 1980s. It is a directive which is pro-consumer—it gives greater protection to consumers than exists today. It helps to complete the single market in fund management. It is supportive of UK-based financial services businesses. At a time when lots of contentious matters come from Brussels which we rightly debate at length in your Lordships' House, it is remarkable that the Opposition seek to find fault with something which has been endorsed by consumer and business interests. I do not know whether the noble Lord, Lord Eatwell, talked to his noble friend, Lord Davies of Oldham, who, in a Written Ministerial Statement laid in this House on 4 June 2007, said that the UK supported the commission's proposals for reform of the UCITS framework. Those are the proposals which we consider this afternoon. He may or may not have talked to his colleague, Mr Chris Leslie, who in another place this Monday said, among other things, that the regulations are generally uncontentious. That seems remarkably at odds with the position taken by the noble Lord, Lord Eatwell. Unless noble Lords would like me to, I do not want to prolong debate on what is, as I said, a very good piece of legislation proposed by the Commission which has had the UK's full support over the past three years. In answer to the noble Lord’s specific question and contentions, he is wrong in what he says about the passporting of funds. It is true that incoming funds can start accessing the UK market as soon as a complete notification is received, but the FSA does not believe that that will significantly change the processes by which it monitors incoming UCITS today. The funds will still be required to comply with UK law, and the FSA will be able to direct its operator to suspend the promotion of the scheme if it contravenes those laws. I do not believe in the premise from which the noble Lord, Lord Eatwell, starts. Indeed, in answer to his question, we will be bringing in tighter protection for consumers on 1 July, because that is precisely what, among other things, the instrument does. It improves and simplifies investor disclosure, making it easier for investors to understand the risks involved in what they are buying. I could go on, but I think that I have detained the House long enough. Motion agreed.