FSA exemption plan challenged.

Government plans to allow accountants and other professions limited exemption from direct supervision by the Financial Services Authority have been challenged in the Commons by the Tories. Tory spokesman Howard Flight was concerned that the line being drawn between occasional ancillary services for clients and the provision of financial services is not sufficiently clear. Firms engaging in the business of providing financial services will come directly under FSA regulation. Those who provide advice purely as part of accountancy services to clients will be subject to regulation through professional bodies. Flight said earlier he was worried that because the line had not been spelled out in sufficient detail, to be on the safe side for regulatory purposes more firms than necessary would apply to the FSA, swamping their machinery. The proposals were contained in six new clauses being debated in the Commons earlier this week among 114 pages of potential changes to the Financial Services Authority Bill, including 480 amendments – around 250 from the government – and 43 new clauses. Earlier it was made clear the government is considering statutory powers to make ex-gratia payments for those hit by misjudgements of the Financial Services Authority. Economic secretary Melanie Johnson said ministers are awaiting the conclusion of FSA consultations on arrangements for dealing with complaints against them. She was commenting on a Conservative proposal that the proposed independent complaints investigator should have the power to recommend the amount of ex-gratia payments to aggrieved parties. Shadow Chief Secretary and accountant MP David Heathcoat-Amory said he welcomed the decision to allow professional bodies to regulate accountants, provided the exemption was not so wide as to give unfair advantage compared with those subject to direct FSA regulation.

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