Government has tabled an amendment to the Financial Services Bill around social investment which favourably responds to concerns raised by Peers this summer, says Luke Fletcher, an associate at charity law firm Bates Wells and Braithwaite.
The Financial Services Bill is currently going through the House of Lords and will be debated again next week Monday at Report stage.
On behalf of government, Lord Sassoon has tabled an amendment to the Bill which says the new Financial Conduct Authority should recognise “the differing expectations that consumers may have in relation to different kinds of investment or other transaction".
Fletcher calls this amendment “meaningful and substantive”:
“Some very important points of principle have been recognised,” he says. “The amendment is clearly in response to the social investment concerns previously raised by Lord Phillips, Baroness Kramer and Lord Hodgson. The amendments impliedly recognise that social investors may have different expectations to other investors; and social investment businesses may have different natures and different objectives to ordinary investment businesses.”
This summer, Lord Phillips of Sudbury told civilsociety.co.uk that he was hopeful that government would support concessions for social investment in the Financial Services Bill which is currently at Report stage in the House of Lord.
Lord Sassoon has also tabled amendments around communities accessing finance in deprived areas.
Lord Hodgson has tabled an amendment giving Treasury the power to give the Financial Conduct Authority and Prudential Regulation Authority different objectives with respect to social investment and consumer protection. Baroness Kramer and Lord Sharkey are also seeking an amendment which would require banks to disclose lending to SMEs by postcode, to strengthen community finance provision.
Also, there is a new amendment put forward by Lord Hodgson requiring the Financial Conduct Authority and Prudential Regulation Authority to consult on the regulation of common investment funds and common deposit funds and empowering the Treasury to exempt common investment funds and common deposit funds from some of the regulation applying to normal funds, due to their special features.
