UK FSA replacement body urged to have social finance ‘duty’

Social investors back proposed amendments to Financial Services Bill.

The heads of twenty UK social investing bodies have written to UK Financial Secretary Mark Hoban urging him to push the Financial Conduct Authority (FCA), one of the planned replacements for the country’s FSA regulator, to have a social investment ‘duty’ and put together a related panel of experts to advise it. The Financial Conduct Authority (FCA), previously known as the Consumer Protection and Markets Authority (CPMA), is one of the bodies succeeding the FSA following the financial crisis. Its role will be to regulate retail and wholesale financial firms and maintain the integrity of the UK’s financial markets.
The social finance chiefs are backing the two changes, which have been lodged as proposed amendments to the forthcoming Financial Services Bill that will outline the FCA’s responsibilities that would promote social investment. Chris Leslie MP, the Shadow Financial Secretary to the Treasury, tabled the amendments –numbers 72 and 73 – to the Bill. If successful, the amendments would require the FCA to promote the development of social finance and consult the expert board on policy.Sir Stuart Etherington, Chief Executive of the National Council for Voluntary Organisations (NCVO) one of the twenty signatories, said: “In these challenging economic times, social investment can form part of the solution by supporting civil society organisations to become more innovative, effective and financially secure. Government has a real opportunity to capitalise on this potential as it seeks to build a strong and sustainable economy.”
Other supporting organisations included UKSIF, Bridges Ventures and Big Issue Invest.
UK Member of Parliament, Leslie, who represents the Labour Party, has also been promoting a number of reforms to shareholder involvement in corporate governance as part of the Opposition’s campaign on responsible capitalism. At a London conference last week put on by PIRC, the shareholder voting research company, Leslie laid out eight policy statements he said the party would be backing. They included the inclusion of employee representatives on remuneration committees and the publication of company pay ratios between the highest paid staff member and that of the median company salary. He said these would be added as amendments to the Financial Services Bill under the aegis of ‘fiduciary duty of care’ for the management of pension assets.