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uk financial services bill November 19, 2009

Posted by Bradley in : financial regulation , trackback

The Bill, introduced today, contains provisions which would make the FSA responsible for ensuring financial stability, about remuneration, recovery and resolution, and short selling. The Bill includes new enforcement provisions including provisions for a collective proceedings. The Bill also provides:

6A Enhancing public understanding of financial matters etc
(1) The Authority must establish a body corporate (“the consumer financial education body”) whose function (“the consumer financial education function”) is to enhance-
(a) the understanding and knowledge of members of the public of financial matters (including the UK financial system); and
(b) the ability of members of the public to manage their own financial affairs.
(2) The consumer financial education function includes, in particular-
(a) promoting awareness of the benefits of financial planning;
(b) promoting awareness of the financial advantages and disadvantages in relation to the supply of particular kinds of goods or services;
(c) promoting awareness of the benefits and risks associated with different kinds of financial dealing (which includes informing the Authority and other bodies of those benefits and risks);
(d) the publication of educational materials or the carrying out of other educational activities; and
(e) the provision of information and advice to members of the public.

But a schedule to the Bill includes an odd requirement that the new consumer financial education body must have regard to “maintaining confidence in the UK financial system; and … maintaining the stability of the UK financial system”. How could a consumer body hobbled by such a requirement effectively educate consumers?

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