Financial Services Bill (Second sitting)

Angela Richardson Excerpts

Committee stage & Committee Debate: 2nd sitting: House of Commons
Tuesday 17th November 2020 Public Bill Committees

[Alison Thewliss]

Thank you very much.

[Angela Richardson (Guildford) (Con)]

Q Adam, in your earlier comments you said that London is the financial services hub of the EU and that it has been a strong voice in shaping the EU’s regulatory framework. First, do you believe that we will continue to be a strong voice in global regulator-to-regulator discussions? Secondly, do you agree that the Financial Services Bill will increase the UK’s resilience to economic shocks, while meeting our international commitments on protecting the global financial system?

Adam Farkas: Answering the first question involves a bit of speculation into the future. Given the importance of the City of London as a global financial centre, and given the weight and experience of UK authorities in global standard-setting bodies, I would be inclined to confirm that yes, the United Kingdom is expected to remain a strong voice in multilateral standard-setting bodies and in multilateral discussions on financial stability, as well as in micro-financial regulation, markets, insurance and prudential banking regulation.

There is probably no conclusive answer to your second question, but the Bill certainly opens up the possibility of creating a framework within the United Kingdom that will delegate a lot of rule-making powers to the respective authorities—the PRA and the FCA. It will provide a well-defined, clear and transparent framework, and it will also define an accountability regime with that framework. In my view, that will establish the possibility—subject to the detailed rules that will then be adopted—that financial regulation as a whole will continue to ensure financial stability in a global financial centre.

[Angela Richardson]

Thank you.

[Gareth Davies]

Q My understanding is that the British Government have so far filled out something like 2,500 pages of questions from the European Union, all of them to strict deadlines. What do you think has caused the delay in the EU granting equivalence or making any public statement on that? Clearly the UK is equivalent, so what is causing the delay?

Adam Farkas: I do not know. What I can say is that the equivalence determination process consists of two stages. One is a technical assessment that involves a detailed assessment of the rule book for the set of regulations, with questions and interactions. In every jurisdiction there is a second stage, which is the determination itself after the technical assessment. That stage is a much more political decision, or is a decision of a more political nature; it considers other aspects in addition to the interests of the jurisdiction making the determination. The answer probably lies there, but I have no information on why equivalence decisions have not yet been made on the EU side. It is not true to say that no equivalence decisions have been made; some have been determined and published, even if on a temporary basis.

Financial Services Bill

Angela Richardson Excerpts

Report stage & 3rd reading & 3rd reading: House of Commons & Report stage: House of Commons
Wednesday 13th January 2021 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

We come to Angela Richardson on a three-minute limit.

[Angela Richardson (Guildford) (Con) [V]]

It was an honour to serve on the Financial Services Bill Committee and it is a privilege to speak on Report today.

I will speak to specific amendments, but first I would like to say that last century—well before the global financial crisis of this century—I was cutting my teeth in this sector, settling trades, including derivatives, for a US investment bank in New Zealand. We watched in shock as the actions of a lone trader in Singapore caused the collapse of Barings bank. I worked through the subsequent insertion of Chinese walls between departments, saw the creation of compliance and risk management roles and the impact of a change in culture on the institution. I therefore understand the importance of proper regulation and confidence in our regulators. I was pleased to hear the Minister confirm in his opening statement that this corporate governance continues to be strengthened today.

It is only appropriate that the scope of the Bill extends to effectively tackling money laundering and providing clear, streamlined procedures for dealing with entities that engage in this type of activity. As more aspects of our lives, including financial activities, move online, so do illicit activities such as money laundering. Therefore, legislation aiming to prevent and deal with illegal financial activity must have as broad a scope as possible, bolster existing legal provisions and be as clear and as easy to enforce as possible.

New clause 6 rightly aims to broaden the scope of the Bill to prevent money laundering in the context of electronic money institutions. However, the language of the new clause is inconsistent with legislation already in place, potentially generating confusion that could result in diminished enforcement ability. The Government’s new clauses 27 and 28 and new schedule 1 better achieve the desired effect of a more robust and comprehensive enforcement regime, which is why I will support them today. I am pleased that the Opposition Front-Bench team will not move new clause 6.