Chief Treasury secretary Paul Boateng spelled out Britain’s position on the proposed Investment Services Directive, which includes a requirement for dealers to carry out a suitability test before executing client orders, in reply to questions in the Commons.
He said the restriction would add to costs and would be likely to deter firms from offering execution-only services such as online share dealing and customers from using them.
He said the UK government believes execution-only business ‘should not be compromised by over-burdensome, unnecessary regulation’.
It was helpful to markets, he said, and provides low cost access to a wider range of investors.
The government was ‘making every effort’ to ensure that the draft Directive is amended in such a way that will allow online share dealing to continue.
Treasury figures showed the market soared from £5.5bn in 1999 to £9.6bn in 2000 before dropping back to £8.3bn in 2002.
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