HM Treasury News Release
118/96                                            17 July 1996
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                     Making Regulation Work

The challenge is to make financial regulation more cost effective
and less burdensome while at the same time maintaining investor
protection Treasury Minister Angela Knight said today. Mrs Knight
set out emerging themes for effective regulation but emphasised
that the key to success will be to make the current system work
not in wholesale change to the structure of regulation.

The Minister said that the next step was to improve the
techniques of regulation. She said there were many goods ideas
coming forward.  The challenge for the industry is to make a
constructive contribution to the debate that is taking place.

Mrs Knight singled out  the new disclosure framework for the life
industry and the training and competence regime, which have paved
the way for  :

          the PIA evolution project, which is looking at ways of 
          delivering investor protection more efficiently and
          effectively; and

          IMRO's pilot project to test more targeted supervision
          and monitoring.


Mrs Knight said:

     "This last year has been something of a watershed for the
     regulation of financial services. It was in October that
     Sir Andrew Large set out his thoughts on the direction fo
     regulation in the post-disclosure world.  And now both PIA
     and IMRO have responded to the call and have launched their
     own initiatives.  These are designed to make regulation
     both more appropriate and less intrusive."

     "This is a major undertaking.  It needs to involve everyone
     : the regulators themselves, and industry experts.It also,
     of course, requires consumers to take part if together we
     are to find better ways of delivering the higher standards
     of investor protection we all want."

     "I expect  the role of the financial adviser to become
     increasingly  important. As people's financial needs
     increase, and the industry becomes more complicated, people
     need advice more and more.  They look increasingly to a
     knowledgable and trustworthy expert who can advise on which
     products are likely to be most useful."

     "I hope that the Treasury will continue to be  seen as
     a place where business can voice its concerns about 
     regulation and other requirements which might be
     having an unintended or inhibiting effect on their
     livelihood."

Mrs Knight was speaking a the Society of Financial Advisers
conference in London. She asked for industry practitioners to set
out their ideas for the reform of financial regulation at the
SOFA conference in Birmingham last December.