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MP to lobby TSC on long-stop

by: IFAonline
  • 07/01/2011
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MP to lobby TSC on long-stop
MP Mark Garnier has pledged to "pick up the baton and run with it" on the reintroduction of a 15 year long-stop for advisers, starting with lobbying the influential Treasury Select Committee (TSC) on which he sits.

Tory backbencher Garnier has risen to prominence since his election to Wyre Forest in May for championing the cause of older advisers who fear the RDR will force them out of a job by 2012.

He said if there is the same level of support within the industry for  Parliamentary scrutiny of the long-stop debate he will act on that as well.

“If it is something people want brought forward I would be very happy to pick up the baton and run with it.

“It is an incredibly important point and one I feel I must bring up with the TSC.”

Garnier has spoken to Adviser Alliance founder Alan Lakey about an industry long-stop, and he is urging other advisers to contact him on the issue.

The moves comes as lawyers and advisers say upcoming legislative change to agree the Consumer Protection and Markets Authority’s (CMPA) remit favours 2011 as the year to re-establish a 15-year long-stop.

Advisers complain they are the only group which carries professional liability “to the grave”, and have been agitating for the reinstatement of a time limit on their legal responsibility to clients in respect of advice. 

The FSA will not recognise a long-stop as it was not included in the Financial Services and Markets Act (FSMA) 2000, which created the regulator and established its rule-making powers.

But campaigners and regulatory experts expect the coalition government’s decision to break up the FSA and replace it with the CPMA and the Prudential Regulatory Authority by mid-2012 to lead to the scrapping of FSMA.

MPs chose to discard the Financial Services Act 1986 and start again anew when they created FSMA during the last financial services overhaul.

Jonathan Davies, specialist financial services partner at lawyers Reynolds Porter Chamberlain, said he assumes Parliament will begin creating a new financial services act this year, potentially taking the long-stop decision out of the hands of the regulator.

“A new set of statutory provisions opens up the opportunity for any MP or peer to make an amendment to include the statute of limitations.

“If someone moves an amendment in Parliament it becomes an issue for the Houses of Parliament, not the FSA, and more often than not the amendment will pass.”

The CPMA will take up responsibility for safeguarding consumers, market conduct, the Financial Ombudsman Service and the compensation scheme (FSCS).

Derek Bradley, chief executive of IFA forum Panacea, said he is in talks with MPs who are looking at the creation of the CMPA as the ideal time to address the long-stop issue.

“Speaker of the House John Bercow expressed incredulity that there is no end to liability.

“MPs felt it was wrong that the FOS is allowed to get away with saying it doesn’t recognise a long-stop,” he said.

He is calling for a return to the rules under the forerunner to the FOS, the PIA Ombudsman Bureau.

The PIA was not permitted to deal with negligence claims which would be time-barred under the Limitation Act 1980, namely once 15 years had passed.

TSC members are currently collecting evidence on whether the RDR will achieve its stated outcomes, and whether the outcomes could be achieved in other, potentially better, ways.

The deadline for submissions is 12 noon on 17 January.

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