Mark Durkan
Main Page: Mark Durkan (Social Democratic & Labour Party - Foyle)Department Debates - View all Mark Durkan's debates with the HM Treasury
(13 years, 2 months ago)
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Alun Cairns
My right hon. Friend raises a good point. I have raised that issue with the FSA, which said that it was beyond its jurisdiction. However, to my mind, protecting UK investors is certainly its priority and should fall within its jurisdiction.
To date, there has been no explanation of the logic behind the £54 million offered, and the conditions are somewhat restrictive. Having recently met with the FSA, I know that the reasons behind the current delay concern third-party rights, which I understand. However, it has taken more than two and a half years from suspension to get to the current stage.
I have a constituent who invested several hundred thousand pounds of his retirement money into the funds, but there will be constituents of other hon. Members present who had invested far smaller sums, and which may be even more significant to them individually. A figure of 70% of the valuation at suspension is completely inappropriate, given that all that our constituents had done was to invest in a regulated, cautious-managed fund with a regulated, authorised corporate director and approved auditors. The delay conflicts with the timing of a possible legal challenge. Investors need to act soon to fall within the legal time frame set out by the courts.
In considering criticism of the FSA, it seems hardly just that, having failed in its responsibility to regulate, it has the responsibility to investigate and negotiate a compensation package for the people whom it failed in the first place.
Mark Durkan (Foyle) (SDLP)
The debate shows that we have a fund that was a scam and regulation that was a sham. We have a problem not just with the FSA’s dereliction of regulatory oversight, but with its deviance and connivance in the deed with Capita. This debate is an opportunity for Parliament to blow the whistle. The FSA is now blatantly offside, and surely it is up to the Minister and the Treasury to make it clear that the deed cannot stand and the deadline must not stand.
Alun Cairns
The hon. Gentleman has made an extremely powerful point. This is the first debate on Arch Cru, and certainly on the FSA and its change to the successor bodies. Those who have responsibility for this matter need to bear in mind the strength of feeling among investors and the number of people who have turned up to this debate. This issue will not go away until investors feel that they have received justice.
The regulator, the Financial Services Authority, arguably failed in its duty as did the investigators and negotiators. Clearly, there was a position of conflict. It angers me that at every meeting and in every communication, the FSA points its finger at the independent financial advisers. In view of the FSA’s four strategy objectives, passing the buck to the IFAs is wholly inadequate. The pricing and fund performance would have been integral to the advice provided by any independent financial adviser.
In a meeting last week, the FSA told me that the obligation of suitability lies with the IFA. It is unrealistic for IFAs to have the capacity to interrogate individually all marketed funds, products and pricing strategies, or to speak to the financial directors and auditors of every firm on which they advise, when the FSA, with all its resources, failed to protect investors from wrongdoing in this respect.