Final day of FSMB debate published

In the morning and afternoon of the final day of the Public Bills Committee debate on the FSM Bill, the remaining tabled new clauses were discussed:

  • that the Chair of the PSR should be a member of the FCA board:  this was agreed and added to the Bill;
  • to include a definition of “cryptoasset” within FSMA and allow for Treasury to amend it by statutory instrument, and to add cryptoassets to the financial promotion and regulated activity restrictions in appropriate places: this was agreed and added to the Bill;
  • to require regulations on BNPL to be published within 28 days of the Act’s Royal Assent: Stella Creasy proposed that these regulations would require FCA to regulate not only BNPL but also other lending services that have non-interest-bearing elements, and that all individuals accessing the services should have access to FOS, be subject to pre-approval credit checks and Emma Hardy additionally proposed it should ensure individuals accessing the services had s75 CCA protection: Stella Creasy said that over 2 years since the debate over BNPL started, and over a year after the Government agreed to act, still nothing has been done. Tulip Siddiq pointed out that the Government’s consultation had concluded in June so the Bill was the perfect time to address regulation.  Andrew Griffith said that to require the Government to produce regulations at “breakneck speed” would not be supported, because it is critical to get it right, because what the Government does not regulate creates a “floor” beneath which various nefarious operators will work. He said that the Government’s aim is to lay secondary legislation in “mid-2023”. The clause was put to a vote, and narrowly negatived;
  • to require Treasury and FCA to prepare a report on the state of access to essential in-person banking services in local communities, and for Treasury to provide an essential banking services policy statement within 6 months of the Act being passed. There was significant discussion, in which all parties broadly agreed, which ended in the withdrawal of the clause by Tulip Siddiq on the promise of later discussions;
  • to require Treasury to lay before the Commons a national strategy for fraud prevention, detection and investigation within 6 months of the Act being passed. Andrew Griffith said that the Government was committed to the Home Office, supported by Treasury, publishing a strategy later this year. The clause was put to a vote and narrowly negatived;
  • to require FCA to report on mutual and co-operative business models: While the Government recognised the importance of the sector, Andrew Griffith said he did not think requiring an annual report was the best intervention. This was put to a vote and negatived;
  • to require Treasury to lay before the House of Commons an updated Green Finance Strategy within 3 months of the passing of the Act: this was put to a vote and negatived;
  • to prohibit PSPs from providing certain services if the reason for refusal is significantly related to the customer exercising rights to freedom of expression: this was withdrawn after debate;
  • to provide that regulators may be the subject of civil damages actions where a consumer has suffered as a result of a prohibited act which the regulator did not do enough to prevent: this was withdrawn after debate, but may be brought up again at a later time;
  • to require the regulator’s reporting requirement to include an assessment of performance in fulfilling the competitiveness and growth objective: this was withdrawn after debate; and
  • to include specific proportionality principles in regulatory objectives: this was also withdrawn after debate.

Emma Radmore