Financial Services: Regulation

Debate between Earl of Kinnoull and Lord Bates

Wednesday 6th September 2017 Lords Chamber

[Lord Bates]

I suppose we can all declare an interest in that. My noble friend may be encouraged to hear that as a result of the money laundering regulations that were laid before the House in June 2017, the FCA has issued guidance on politically exposed persons to ensure that they are dealt with on a case-by-case basis and in a proportionate way, and that organisations focus on those individuals who would be at highest risk and recognise those who are at lowest risk, which I am sure would include all Members of your Lordships’ House.

[The Earl of Kinnoull (CB)]

My Lords, UK non-life insurance brokers are regulated by the FCA and bear the costs of that regulation. Is the Minister aware that the relative cost in the UK is more than twice that in Ireland, Hong Kong and Bermuda? The multiple is bigger in France and Germany. Does he agree that this is unhelpful to the industry and is actually evidence of overregulation?

[Lord Bates]

I respect the knowledge the noble Earl has in this area but there are differences in the way that the regulation is funded in different jurisdictions. I come back to the point that we need to look at how regulation is applied effectively on those who are at highest risk and recognise those who are at lowest risk. The FCA has a statutory duty to establish and consult a small business practitioners’ panel on policies impacting on small and medium-sized enterprises, and I think that is the right way forward.