Report calls for finance industry deregulation
The Deregulation Unit should advise the Government to deregulate the wholesale finance community and retain a single regulator to oversee both the wholesale and retail finance industries.
This is the view of 70 companies surveyed by chartered accountants Moores Rowland in June and submitted to the Deregulation Office two weeks ago.
The report’s conclusions are to be thrown open to wider industry comment at a Government-sponsored deregulation seminar on 25 September.
Although 61% of the survey’s respondents thought regulation had benefited the industry overall, most said current regulations on wholesale finance companies are an expensive burden because professional investors are well able to look after themselves.
The need to provide capital adequacy statements and issue notifications of market counter-parties emerged as unnecessarily burdensome regulations.
‘They think regulation has enhanced the reputation of the City, but it has gone too far in relation to non-private customers,’ said Moores Rowland commodities and derivatives unit head, Joe Michaelson.
More than 56% of the respondents said some regulations should be discarded, and 64% believe some should be amended – primarily to simplify them and reduce the costs of compliance. Many respondents said the best way to simplify them is for all regulators to use common standards and procedures.
The 33% who want more regulation agree that companies using derivatives, offering mortgages, general insurance, long-term care or managing corporate or personal pension funds, need tighter controls.
The Cabinet Office is refusing to comment on the report’s recommendations until after the Financial Services Deregulation seminar in September.
‘We want to gauge what the wider response is,’ a spokeswoman said. ‘We want to see if it’s indicative of general trends.’
Michaelson believes it is. Citing the 3-4% of the 2,700 respondents who replied to Moores Rowland’s questionnaire, he said: ‘I’m told that’s a very good response.’
