The Economic Secretary, Ed Balls, today set out the next steps in the Government's wider dialogue on how best to ensure the continued global success and competitiveness of the UK based financial sector - a dialogue which began with the Chancellor's High Level Group in October. Speaking at a City Competitiveness Breakfast, which brought together leading members of the UK financial service sector, the Economic Secretary announced the following meetings in the new year:
- A discussion of EU regulation and competition policy joined by European Commissioners, Neelie Kroes and Charlie McCreevy, in a City breakfast meeting on 20 February;
- A seminar on principles-based regulation with a presentation from John Tiner, Chief Executive of the FSA; and
- The next full meeting of the High Level Group, hosted by the Chancellor of the Exchequer, Gordon Brown, on 10 May at 11 Downing Street.
The breakfast today provided an opportunity to update the City on progress made since the first High-Level Group. Topics discussed included:
- The Investment Exchanges and Clearing Houses Bill, which completed its Commons Stage yesterday;
- The work of Lord Levene from Lloyds, Grahame Millwater from Willis Re and Andrew Kendrick from Ace European Group on the Wholesale Market Review Group, to support the timely delivery of the modernisation of the wholesale insurance and reinsurance markets in London;
- The findings of Lord Davidson's Review of the goldplating of EU legislation, published yesterday, including work on the Insurance Mediation Directive;
- Recent visits by the Economic Secretary to Tokyo, and to Dubai and Abu Dhabi, promoting the UK financial sector overseas; and
- Areas in which the financial service sector is keen to push for further reform including a discussion of greater clarity over what constitutes a collective investment scheme and the issue of non-resident exchange traded funds.
Commenting on the Government's dialogue with the sector and representations for further reform, Ed Balls said:
"The Government is working in partnership with the City to ensure the continued global success and competitiveness of UK financial services. In the first meeting of the High Level Group we were able to announce a range of measures to promote this competitiveness, but must continue to work closely with and listen to the City. As we prepare for the Pre-Budget Report we will look actively at all issues put to us in recent months, including, for example, greater clarity over what constitutes a collective investment scheme and the issue of non-resident exchange traded funds."
Background
1. The Chancellor's High Level Group first met on 18 October.
2. The City Competitiveness Breakfast was hosted at the Guildhall by Michael Snyder, the Chair of the City of London's Policy & Resources Committee. Also at the breakfast were:
Lord Aldington - Deutsche Bank
Mark Garvin - JP Morgan
Martin Gilbert - Aberdeen Asset Management
Richard Gnodde - Goldman Sachs
Angela Knight - Association of Private Client Investment Managers and Stockbrokers (APCIMS)/British Bankers Association (BBA)
Richard Saunders - Investment Management Association (IMA)
Stephen Sklaroff - Association of British Insurers (ABI)
Bob Wigley - Merrill Lynch
Alan Yarrow - Dresdner Kleinwort
3. Exchange traded funds (ETFs) are listed groupings of shares which track the underlying value of the shares in the fund. Stakeholders in the City have raised concerns that the tax treatment of ETFs may hinder the development of a market in the UK. The Government continues to examine this issue.
4. In order to run a collective investment scheme (CIS) in the UK, persons must obtain Financial Services Authority authorisation. However, representations received by the Treasury have suggested that the legal definition, used for regulatory purposes, needs to be reformed. The Government continues to examine this issue.
