The scrutiny began with discussion about Clause 23, which covers rules and guidance. The Commercial Secretary to the Treasury, Lord Sassoon (Conservative), looked at the issue of financial promotions with his first set of amendments, saying: ‘The regulation of financial promotions may seem relatively minor in importance and impact when compared with some of the other major and systemic issues covered by the bill but, in fact, the appropriate regulation of financial promotions to ensure that they are clear, fair and not misleading is absolutely vital.’
He continued: ‘The fundamental shortcoming of the current financial promotions regime is that in most cases the Financial Services Authority (FSA) is not able to publish the fact that it has asked a firm to withdraw a misleading promotion. The government are committed to ensuring both that the regulator can and does take action in relation to inappropriate promotions and that the regulator is seen to be taking such action.’
Baroness Hayter of Kentish Town (Labour) expressed her concerns, saying: ‘I thank the minister for what I think he thought was reassurance on this amendment. Nevertheless, he will not be surprised to know that I still find it regrettable that it makes permissive, rather than obligatory, the publication of names and details where a firm has been obliged to withdraw a misleading advertisement rather than withdrawing it voluntarily.’
The amendment was later agreed.
Discussion moved on to competition in financial services, Baroness Hayter of Kentish Town (Labour) moved Amendment 86A, saying: ‘The Association of British Insurers (ABI) thinks that the Financial Conduct Authority (FCA) and the Office of Fair Trading (OFT) should be subject to a statutory duty to cooperate and to produce a memorandum of understanding (MoU).’
Viscount Trenchard (Conservative), supported the amendment, saying: ‘I believe that there is too little in the bill about the maintenance of competition. It is too confused. I personally regret that the Prudential Regulation Authority (PRA) has no need to have regard to the maintenance of the competitiveness of the market place.’
The amendment was later withdrawn after Lord Newby (Liberal Democrat), government spokesperson for the Treasury, said: ‘The FSA and OFT already have an MoU in place and are working to put in place a new MoU for the FCA. There is therefore no need for statutory provision to make this happen. There will be an MoU that deals with the issue of coordination on all these matters. We think that that amendment is unnecessary, because it is happening already.’
Further scrutiny of the bill will take place in the House of Lords on 28 November 2012.
Catch up on the Financial Services Bill
What is the report stage?
Report stage in the chamber gives all members of the Lords further opportunity to consider all amendments (proposals for change) to a bill. It usually starts at least 14 days after committee stage. It can be spread over several days (but usually fewer days than at committee stage).
Detailed line by line examination of the separate parts (clauses and schedules) of a bill takes place during report stage.
Before report stage takes place
- The day before report stage starts, amendments are published in a Marshalled List – in which all the amendments are placed in order.
What happens at report stage?
- Detailed line by line examination of the bill continues.
- Votes can take place and any member can take part.
After report stage - third reading
- If the bill is amended it is reprinted to include all the agreed amendments.
- The bill moves to third reading for the final chance for the Lords to debate and amend the bill.
- More about third reading.