Financial Services and Markets Act 2000 (Regulated Activities) (Amendment No. 3) Order 2006

I am grateful to the noble Baroness for clarifying that issue. I had forgotten that we had ranged over such an extensive history and had made such a projection forward to 2010 that I had to adjust my figures as I was concentrating on the orders before us. The House will forgive me if I made that mistake. The noble Baroness asked about security for investors. This anxiety about the small independent financial adviser is ill placed. If the small independent financial advisers are not covered by this directive, and although anxieties might be expressed about what might develop in the future, we will cross that bridge when we come to it. They are not covered by the directive. I therefore do not think that I have anything in particular to say about that. There was a question about whether we succeeded in keeping gold-plating at bay. The Treasury and the FSA are making only very limited additions to the directive where there is a very clear-cut case of advantage to the United Kingdom citizen. The FSA rules will be produced this week and the truth of what I am saying can be examined then by noble Lords opposite. We are conscious that we do not want to add to this directive save in so far as we have clear instances where we can give benefits to the people of the United Kingdom in the extra security which we already have in place and which we have signalled to the Commission we intend to sustain. That is a long way from selling the British people short on the development of this directive. As the noble Baroness was kind enough to recognise, the directive forms a key part of the FSAP and represents a step towards the objective of an integrated European capital market. It will reduce the cost of capital and facilitate enhanced growth and employment. Why should we not welcome the development of this initiative, knowing full well that we have a financial industry that is best placed to take advantage of these circumstances? MiFID is also an important test of the new Lamfalussy approach to European legislation. The efforts that the CESR, the Commission and national authorities have put into delivering the necessary clarity at level 3 are to be applauded, as is the work of the trade associations in producing their own guidance, for example, via MiFID Connect. The four pieces of legislation that we are considering today represent the backbone of the Treasury’s responsibility as regards transposition, with the majority of the work being done by the FSA by their rules. That is why the noble Lord, Lord Newby, is right to emphasise how important it is to see how the FSA intends to square up to its obligations, which will become clear by the end of this month. Significant attention has been given to the cost of implementation. We have done our bit to help minimise this by working closely with firms throughout the process. The noble Baroness was kind enough to recognise that substantial consultation has gone on in the development of this work, limiting the changes to the current structure and introducing saving transitionals to ease the move from ISD to MiFID. There is a cost to this transition; that goes without saying. As I have indicated by the figures that I quoted in my opening statement, the costs are not insubstantial. Nevertheless, the benefits are not insubstantial either, and we are well placed to reap those benefits. The legislation and the MiFID regime are an important step towards a truly integrated market for financial services in Europe. MiFID breaks down barriers and promotes competition. As the House will recognise, we in this country have been praised for the competitiveness and openness of our financial services and the market that we operate. We take pride in that position, and we recognise that, worldwide, London has great pre-eminence in these terms. There is absolutely nothing for us to fear from MiFID; rather there are opportunities that we should seize. On Question, Motion agreed to.