IAIM leader says watchdog's remit must restore trust

The public and media should be more concerned about the remit of the proposed new single regulator for the Irish financial services industry than they are about who that regulator might be, according to Ms Ann Fitzgerald, secretary-general of the Irish Association of Investment Managers.

Speaking at a company law seminar and book launch in UCD yesterday, Ms Fitzgerald said: "Consumer confidence in the industry has been damaged by recent scandals. This is bad news for the economic health and wellbeing of this country."

While acknowledging the relative success of the regulatory authorities in preserving the stability and solvency of our major financial institutions over the years, she contended that the current system was too fragmented and inconsistent to police an increasingly sophisticated financial services industry.

Ms Fitzgerald highlighted what she saw as obvious discrepancies in the current system, whereby, for example, investment managers are bound by explicit conduct of business rules, while banks and insurance companies are not.

"We should have a regulatory system which operates to the highest international standards," she said.

Ms Fitzgerald called for a regulatory watchdog which would be cohesive, have the best possible knowledge of the industry and treat similar product providers fairly. It would supervise solvency while ensuring consumer confidence in the service providers. The new regulator should also play a role in educating consumers on new trends in financial services, possibly with the aid of the Internet, she said.

Importantly, the regulator should have powers to fine, "name and shame" and bring to court those companies who have abused positions of trust.

Meanwhile, the conference, organised by legal firm Mason Hayes and Curran, heard that the traditionally lax response of the authorities to low levels of corporate compliance is set to change radically once the Government implements the recommendations of the Working Group on Company Law Compliance and Enforcement.

Mr Michael McDowell, the chairman of that group, said impending compliance legislation would be as important to company law as the the 1966 Local Government Planning and Development Act was for structured development and conservation.

He said the crucial difference would be a new climate of enforcement, where it would be "somebody's job to ensure registers are kept and somebody's job to bring offenders to court".