Whitehall rejects calls for FSA curbs

THE GOVERNMENT has rejected calls for major curbs on the powers of the Financial Services Authority, insisting that advice from prominent QCs is that these do not breach the European Convention on Human Rights, writes Andrew Garfield.

The Treasury yesterday wrote to the joint committee of both houses of parliament which last month criticised the lack of safeguards in disciplinary proceedings, saying that it is satisfied with the Financial Services and Markets Bill as it stands, although it has accepted the need for a few minor amendments to the clauses covering so-called market abuse, particularly as far as the use of evidence given under compulsion is concerned. The Treasury minister, Patricia Hewitt, is to go before the committee on Wednesday to explain the Government's view that the Bill is "fundamentally sound".

Yesterday's response comes barely a fortnight after the committee warned that the sweeping powers being given to the FSA could violate the human rights convention and fatally undermine the Government's goal of creating a one-stop-shop for financial regulation.

The committee was particularly concerned about sweeping powers being given to the FSA to levy fines on those who have committed offences such as insider dealing, without recourse to the criminal courts.