The boss of the City watchdog has said that authorities need to look more closely at a system which allowed failed finance company Greensill to operate in the UK without a licence.
Greensill was able to do some of its business by piggybacking off US-based Mirabella Advisers, which is licensed in the UK.
It meant that Mirabella had the responsibility to ensure that Greensill was playing according to the rules, while Greensill itself was not regulated by the Financial Conduct Authority (FCA).
The system which made Greensill an “appointed representative” of Mirabella, which was known as the principle.
The appointed representative system was launched in the 1980s to allow small, self-employed providers to not each have to get a license and be overseen by the regulators.
An independent probe into lobbying on behalf of Greensill Capital by David Cameron needs to investigate why there is “one rule” for Tory politicians and another for the rest of the public, according to a senior Labour figure.
Shadow chancellor Anneliese Dodds has been granted an urgent Commons question calling on Chancellor Rishi Sunak to explain how Greensill was granted access to a Covid loan scheme for businesses, putting hundreds of millions of pounds taxpayers’ money at risk.
The move comes after Downing Street announced the senior lawyer, Nigel Boardman, had been commissioned to carry out a review into how the failed firm – founded by Australian financier Lex Greensill – was able to secure Government contracts.