Draft Uncertificated Securities (Amendment and EU Exit) Regulations 2019

Debate between Alison Thewliss and Ranil Jayawardena

Tuesday 12th March 2019 General Committees

[Alison Thewliss (Glasgow Central) (SNP)]

It is a pleasure to see you in the Chair, Mr Sharma. I very much agree with what has been said by the Labour Front-Bench spokesperson, the hon. Member for Stalybridge and Hyde. I do not want to delay us from all the exciting statements still struggling on in the Chamber, but I want to raise a couple of points.

The Minister will not be surprised to hear me say again that this is not what Scotland voted for and not what Scotland’s financial sector needs. Our interests are not best served by being taken out of the EU single market and customs union. The deal we have as a member state is particularly good for financial services. Nothing that the Prime Minister can negotiate will come anywhere near what we have at the moment. Nevertheless, we need to ensure that what comes into place does not undermine all the progress made since the financial crash. We cannot allow Brexit to be an excuse for any kind of backsliding on that regulation and on the progress made. I would like assurances from the Minister that none of the provisions in the SI would allow those kinds of things to happen.

I understand that a few concerns were raised in the Lords about the SI and the landscape in which it would sit. It has been raised before in Committee that we have all these financial services SIs coming through but no comprehensive picture of what the full jigsaw will look like when it is put together, or even if the pieces of the puzzle fit neatly. It would be good to hear a bit more from the Minister about the Government’s intentions. We have so much coming through at the moment that we need some clarity to ensure that nothing falls through the gaps, be it for purposes that are innocent or otherwise. We need to ensure that the system does not allow anything like that to happen.

In the Lords, Baroness Bowles said that

“by the time we have ploughed through all 60 statutory instruments that we are told we have to deal with, and then whatever other number we may get regarding corrections and re-workings—some of which are coming along now—FSMA will be even more incomprehensible on the legislation website, and so too will be any sensible comparison of how EU legislation has been retained with regard to the EU originals… It is actually quite a mockery to make a fuss about the accessibility and clarity of wording in individual documents while it remains impossible to find out their cumulative effect.”—[Official Report, House of Lords, 25 February 2019; Vol. 796, c. 33.]

We need to get to that cumulative effect.

The hon. Member for North East Hampshire made an interesting point about the fees and the powers going to the Bank of England. I have raised the issue of fees before, and it would be good to get more clarity on the scale, size, scope and application of the fees and how they would work. It seems that here and in all our other financial services SIs it is the Bank of England, the FCA and other bodies that are getting powers, not Parliament, which, as I am sure he would agree, is barely taking back control. I am sure that is not his intention with Brexit.

[Mr Jayawardena]

indicated assent.

[Alison Thewliss]

The hon. Gentleman is nodding his head.

Are there any resource implications, as indicated by the fees, for the Bank of England or the FCA, that would have to be recouped through the fees? How many more people would be needed to process these types of uncertificated securities? Do the Government have any idea how many people and what processes they might need? Is there a cost they would affix to that which we could see and understand?

The Minister mentioned the consultation process. It would be interesting to know what changed with that process. Can he give any narrative on where he started out and where he ended up, and were any substantial changes made as a result? I continue to be concerned that there is not enough ability for people to engage and for organisations and those concerned about uncertificated securities to come and give their views and seek changes. The biggest problem with the SI and the way the process works is that we cannot amend it—we accept it or reject it, but we cannot amend it. It is difficult to see where corrections might come from and what tracking there is of that.