Innovation Meets The Financial Services Bill

Embedded below is a set of amendments to the Financial Services Bill which I've prepared with the help of a colleague, Tony Watts, at the invitation of several Peers to aid in their review of the Bill. The paper builds on a submission to the UK government in January.

The aim is to require the authorities to encourage responsible innovation in retail financial services generally and, as a case in point, to clear the way for the growth of peer-to-peer platforms - transparent, low cost services that are open to all but which don't tie up vast amounts of capital or require a public guarantee.

Specifically, these amendments will:

1. Generally oblige the financial authorities to look outside the regulated markets when assessing whether there is adequate competition within those markets;  
2. Remove the uncertainty, cost and delay in launching new peer-to-peer platforms, by creating a clear set of rules by which they must operate, regardless of the type of instruments available (reflecting the carve-out for retail payment services from the historic ‘banking monopoly’); 
3. Enable the inclusion of peer-to-peer loans and investments within the small range of assets currently available to ordinary people via ISAs.
4. Enable the same process of evolution towards cost-efficient and transparent financial services that we have already seen in other online retail markets.

The document is still in draft, and comments are welcome.

Proposed amendments to the financial services bill sdj 21 06 12

View more documents from Simon Deane-Johns.

Image from NE Generation.