Amendments to the Financial Services Bill that support social investment have been passed in the House of Lords.
The amendments, proposed by Lord Hodgson, will encourage regulators to consider the different expectations social investors have compared with other investments.
The amendments were strongly campaigned for by the Social Investment Forum – a collective of social investment intermediaries led by Social Enterprise UK.
The campaign included an open letter to Lord Sassoon, the minister overseeing the Bill, requesting his support and signed by 18 civil society leaders including Peter Holbrook, chief executive of Social Enterprise UK; Nick O'Donohoe, chief executive of Big Society Capital; and Jonathan Jenkins, chief executive of the Social Investment Business.
During the debate where the amendments where passed, Liberal Democrat peer Lord Newby who sits on the Bill’s committee said that government was committed to supporting the nascent social investment sector.
He said that the FSA (soon to be replaced by the Financial Conduct Authority) had agreed to make clear that its existing rules did not restrict advised sales of social investment products. Lord Newby also announced that the financial regulator will have a dedicated person for social investment.
Commenting on the passed amendments, Peter Holbrook said: “These amendments are the result of almost a year’s campaigning by the Social Investment Forum. Working to support the efforts of Lord Phillips, Baroness Kramer and Lord Hodgson, the Forum has used its collective influence to create a financial landscape that will boost investment in social enterprises and charities – a source of capital that will be vital to their futures in these austere times.
“But the work is not over yet. The Forum will continue to represent the social finance sector, working with regulatory bodies to understand how these amendments can be applied to support the growth of the social investment market.”