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Regulator voices worry over PIA

Paul Durman
Tuesday 25 January 1994 19:02 EST
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FIMBRA, the regulator of financial advisers, yesterday expressed its concern that financial practitioners will be denied a full role in running the Personal Investment Authority, the body that hopes to take on responsibility for safeguarding private savings, writes Paul Durman.

Fimbra said it attached great importance, in the interest of effective investor protection, to a full participation of practitioners in the system of self-regulation. 'It is vital that there should be a full involvement of practitioners in the committee and working parties of the PIA and that these should report directly to the PIA board,' it said.

Two weeks ago, Jim Stretton of Standard Life, the UK's second-largest life insurer, resigned from the PIA because of its determination to dilute industry involvement in favour of allegedly unaccountable public interest representatives.

Fimbra is also worried that too much power will reside with the PIA's executive, in particular Colette Bowe, the new chief executive who has joined from the Securities and Investments Board, the senior financial regulator.

The PIA is said to be planning to regulate without the standing committees - on training, competence and sales practices - to which many in the financial services industry have grown accustomed. There are fears that ad hoc policy- making procedures will weaken accountability and strengthen executive control, especially if committees are required to report to Ms Bowe instead of the PIA board.

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