The Treasury Sub-Committee on financial services regulations has published correspondence it has had with regulators on:
- sustainable investments: FCA has informed it that it thinks one third of funds that currently claim to offer sustainable products would not qualify under its proposed standards, while another third would not bother to apply to be able to use a “green” label. FCA says its proposals will increase consumer trust in ESG investments. The Sub-Committee is particularly interested in whether the proposals could in fact drive funds away from ESG investing;
- financial advice: FCA says there was a strong appetite from consumers for its proposals on creating a cheap “core” advise service, but says it won’t be drawn on likely costs as it does not want to be seen to be setting an approved price. It notes that the charges will need to represent fair value for the target market. It also noted that firms will need to ensure the core service is only offered when appropriate while noting that the majority of FCA rules will apply to it; and
- Solvency II: the PRA has justified how it is using cost benefit analyses in support of its proposals to introduce or remove new reporting requirements for insurers in the context of the Solvency II review, but did not give an overall figure of the costs of reporting.