PIA clears new hurdle: OFT believes watchdog agency will not restrict competition
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.THE Personal Investment Authority, the agency intended to take on responsibility for the private savings markets, negotiated another obstacle yesterday when it received clearance from the Office of Fair Trading.
Sir Bryan Carsberg, director general of fair trading, ruled that the introduction of the PIA would not restrict, distort or prevent competition to any great extent.
The OFT's report to Kenneth Clarke, Chancellor of the Exchequer, removes one of the last barriers to the PIA's recognition by the Securities and Investments Board. Although the PIA has come under sustained criticism from MPs and from numerous financial services companies, the Treasury and the SIB have both indicated that they are keen to see the new body established.
The final recognition of the PIA, expected in about three weeks, still awaits a ruling from the Friendly Societies Commission. The Commission has a statutory duty to satisfy itself that the PIA's rules are appropriate for friendly societies.
Although the OFT was satisfied about the overall impact of the PIA, Sir Bryan was concerned that three of its rules could prove to be anti-competitive.
These were: the PIA's capital adequacy requirement for members to have net assets of at least pounds 10,000; the controls that prevent the employment of salespeople who owe more than pounds 1,000 to life insurance companies; and rules requiring varying levels of professional indemnity insurance.
The OFT said the rules had 'anti-competitive potential' but were not presently a problem. Sir Bryan will keep them under review.
He also drew attention to the rising costs of self-regulation, and urged that the SIB and the PIA should keep costs under review. It has cost about pounds 6m to set up the PIA and it will cost about pounds 30m a year to run.
The PIA is to take over the responsibilities of Lautro and Fimbra, the regulator of independent financial advisers. It is intended to produce a marked improvement in standards of investor protection.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments