The removal of RU64
You will all be aware Iím sure of the Regulatory Update no 64 (RU64).† This was a ruling that the regulator, the Personal Investment Authority (PIA) put in place in the run-up to the launch of Stakeholder Pensions a few years ago now.† The current regulator, the Financial Services Authority (FSA), is consulting on the removal of this rule.
A number of you have written in to say you liked the BeeLine we put out last week with an extract of the†oral evidence taken before the Treasury Committee (of the United Kingdom Parliament) on Tuesday 8th November 2005.† Another extract from that evidence is included here in this BeeLine.† This short extract deals with the consultation on the removal of RU64.
As before it is taken from an uncorrected transcript of evidence taken in public and reported to the House.† The transcript was placed on the internet on the authority of the Committee and copies have been made available by the Vote Office for the use of Members and others.
Any public use of, or reference to, the contents of the evidence needs to make it clear that neither witnesses nor Members have not yet had the opportunity to correct the record.† As such the transcript is not yet an approved formal record of the proceedings.
The Members present at the Committee on 8th November were: RT Hon John McFall (in the chair); Jim Cousins; Ms Sally Keeble; Susan Kramer; Mr Andrew Love; Kerry McCarthy; Mr Mark Todd; and, Peter Viggers.
The witnesses examined were Sir Callum McCarthy, Chairman, and Mr John Tiner, Chief Executive, of the Financial Services Authority (FSA).
Start of extract
Q56 Ms Keeble: You are currently consulting on the removal of rule RU64, Which? has said that this would make it easier for providers to recommend higher charging for quality products. How do you respond to the Which? criticism and the Which? comments?
Sir Callum McCarthy: One of the concerns that we have is not to try and control prices but to try and establish an efficient market so that people can make choices, and it is entirely in keeping with that that we try and ensure that the market works effectively but do not try to control particular commissions or charges.
Mr Tiner: I think that is right. RU64 was a rule that was written by the PIA a long time ago and I think that we are quite keen not to have detailed rules that prescribe pricing but have a system of disclosure. So that is why we are consulting on removing RU64.
End of extract
As before, if anyone would like to read the whole session of evidence this extract was taken from you can do so by following this next link:
23 November 2005
*††Source:†Uncorrected Transcript Of Oral Evidence, To be published as HC 655-i, House of Commons, Minutes Of Evidence, Taken Before Treasury Committee, Financial Services Authority, Tuesday 8 November 2005.
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