The Treasury has backed away from imposing far-reaching legislation that could have left many firms facing hefty bills for regulation by the Financial Services Authority.
In a consultation document published last week, ministers have watered down earlier proposals that would have required small firms involved in the investment business to pay for regulation by the FSA.
But in the paper, economic secretary Patricia Hewitt said the FSA would not need to regulate those who are conducting investment activities which must be carried out when providing other services.
Accountants welcomed the draft Bill as a positive step and ACCA director Anthony Booth said: ‘This is very much in line with our concerns and we hope things like the definition of other ‘functions’ are made clear as promised.’
Booth said accountants involved in execution-only business should not be able to exploit this non-regulated activity, and that members of the profession should also be able to comment on advice given by independent parties to avoid conflicts of opinion.
The FSA said the Bill was in tandem with its belief of reducing the burden of authorisation where it was unnecessary.
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