My Lords, Amendments 78A and 79A are supported by the Listing Authority Advisory Committee to the FSA, which is an external committee appointed by the FSA. The amendments have the objective of permitting the FCA going forward as the listing authority to have regard to the international character of capital markets and the desirability of maintaining the competitive position of the UK in international capital markets.
The advisory committee is concerned that without the amendment the FCA, when regulating, will not have the power to consider UK competitiveness in international capital markets and could in fact be challenged for doing so unless the issue is specifically covered. Under current legislation, the listing authority is separately set out in FiSMA, while most legislation under FiSMA is about the regulation of those conducting various forms of standard financial services businesses. The listing function is a very different role, though; it is about setting the rules for and regulating listed companies as the issuers of securities, both debt and equity, where issuers obviously have choices as to the markets in which they opt to access capital. Hong Kong in particular has become an even more important financial capital than London, which also faces great competition from New York.
At present, under Section 73 of FiSMA, the FSA is obliged to have regard to market competitiveness and the UK’s position in carrying out this function. These two amendments would leave the listings authority’s role and function substantially aligned with the rest of the FCA but would reflect the fact that this part of the FCA’s function is about regulating listed companies, not the financial services industry. It is different and should have competitiveness not as an objective but simply as a matter to which the FCA should have regard.
This may sound a slightly obscure point but the chairman of the Listing Authority Advisory Committee is concerned that unless this particular, slightly different responsibility of the FCA going forward is given at least the steer to have regard to international competitiveness, it will not be covered by the wider parts of the Bill requiring the FCA to have competitiveness as an objective. I hope that the Minister will be able to give comfort that the wider competitive objective covers the particular listing authority context of the FCA. If not, I hope the Government might consider this somewhat offbeat territory. I beg to move.