Financial Services and Markets Act 2000 (Amendments to Part 18A etc.) Regulations 2010

My Lords, I thank the Minister for introducing these two sets of regulations. They are rather different from each other with the only common point being that each is rooted in Financial Services and Markets Act. It might have been more logical if they had been debated separately. The Treasury's capacity for grouping disparate issues never fails to amaze me. But I missed the trick and so we must debate them together. I shall take the Part 18A regulations first as these are the least controversial and I have no major concerns with them. The regulatory impact assessment says that there will be one Section 313A suspension each year. Will the Minister say how many have actually been made in each year since the FSA opened its doors for business? Linked to that, I note that the annual benefits amount to £10,000 savings for the FSA in each year; that is, each one of these will generate savings of £10,000. That would give a net present value, according to the RIA, of £93,000, which is stated to be over 10 years. I think that that means that the Treasury is using a discount rate of 1 per cent. Will the Minister confirm whether that is the case? If so, why is a 1 per cent discount rate appropriate? More substantively, there clearly have been costs within the Treasury in consulting on, processing and drafting this instrument, not to mention the opportunity costs of the Minister, the noble Lord, Lord Oakeshott, and myself in preparing for and debating these regulations. Does the Minister really think that a net present value of £93,000 can justify the costs incurred in giving the FSA an easier life? The Minister said that this is an important change. It seems to me rather wasteful. With cost-benefit equations like that in the public sector it is not surprising that whoever wins the election will find a lot of low-hanging fruit around to reduce the costs of bureaucracy. I have little to say on the liability of issuers regulations. Perhaps I may be getting demob happy because I think that this is the last time that the Minister and I will be debating statutory instruments this side of the election. The Government have approached this issue carefully, starting with the review carried out by Professor Davies. There was some divergence of views during the consultation, but we agree with the line that the Government have taken. Clearly, one of the most difficult areas was the extraterritorial effect of extending the liability in respect of traded securities from the UK issue, wherever the markets on which they were traded are. We do not disagree with the Government’s approach but if there was to be an area where unintended consequences might occur, this would be my guess. My question to the Government concerns the formal review of these new provisions. The Explanatory Note says that no formal review is scheduled and that the Government will monitor the impact of the regime. The regulatory impact statement is rather more forthcoming and says that the Government would expect to review the policy within three years. Can the Minister be clear with the Committee about the Government’s intentions here? Does the Minister agree that it would be important for the territorial basis of the regime, if not other areas, such as the safe-harbour wording, to be reviewed and will he commit the Government to doing so after a specified time? I have one small point relating to the position of investor claims in the event of insolvency. The consultation response notes that there was a difference of view between those who thought that claims should rank alongside other creditors in an insolvency, which is the current position, and those who thought that such claims should be subordinated. The Government said that these regulations should not be held up while that matter was unresolved and I do not dissent from that, but will the Minster give an idea of when this might be resolved or considered further? I am not aware of any general review of insolvency law into which that sort of issue might be fitted. Is there any special purpose consideration being undertaken and, if so, when might that be brought to a conclusion?