We welcome the fact that some 27,000 intermediary firms will not be brought into the clutches of the FSA, but that was breaking news as we discussed the measures in Committee. It is good to have a little more detail now, but I wish to raise a couple of issues. In particular, new Clause 37 refers to the fact that regulated activities must be incidental to the provision of professional services. Can the Economic Secretary give us more detail about what "incidental" means? It could be defined in several different ways.

I am concerned about equality of regulation. We would not wish to impose yet more regulation on accountancy and legal firms that deal in financial matters, but we would wish to ensure a level playing field with those who will be fully regulated by the FSA because their very business is dealing in financial products. The dividing line is blurring, with the emergence of financial supermarkets—for want of a better term.

Some firms—usually of accountants, but sometimes of solicitors—could be described as managing assets for clients without being asset managers, which would bring them within the scope of the FSA. Such firms can offer advice to clients on the geographical split of assets, or the split between equities or bonds. The firms can also recommend professional dedicated managers, who would look after a certain section of a client's portfolio, or other firms that offer financial products that might be suitable for that client. The firms may even offer bank deposit facilities themselves. In such cases, the firms would not actually be offering financial advice to the client—although at some stage they would take a cut, which they would rightly have to disclose—that would mean that they would be caught by FSA regulations. That is a growing area of the market. Financial intermediaries who, to all intents and purposes, control a client's financial circumstances, parcel out the risk in terms of product selection to other financial managers controlled by the FSA. As I understand the proposals, those intermediaries would be subject neither to the full rigours of FSA inspections or requirements for best advice, nor to the disciplinary procedures.

The result may be that many firms that are, to all intents and purposes, financial managers will opt out of FSA regulation, because they will enjoy a more benign regime under their own professional bodies. What assurances can the Minister give that certain firms will not take advantage of that potential loophole?