UK – Asset owners part of the forthcoming investor forum, one of the main recommendations of the UK's Kay Review, must make sure to have proper procedures in place to avoid collusion and insider trading, a government minister has said.

Secretary of state Vince Cable, whose Department for Business Innovation and Skills (BIS) commissioned John Kay to report on long-term investing 2011, also said he hoped the forum would come about in a matter of "weeks or months, rather than years" – although critics have questioned how effective a cross-industry initiative could be.

Giving evidence to the parliamentary committee on business, innovation and skills, the Liberal Democrat minister said his department had not drawn up a remit for the forum, as he thought Kay was "sufficiently clear" in his report on its goals.  

He spoke on the same day that the IMA, NAPF and ABI – the UK asset management, pension and insurance trade bodies – announced they were setting up a working group on the matter.

Cable said: "The trade bodies should promote it, which they are now doing through the steering body. But, of course, they shouldn't run it – it should be independent of the trade bodies."

In a statement, the industry bodies said the working group would "examine ways in which the considerable amount of existing collective shareholder engagement [could] be built upon," a turn of phrase MP and committee member Mike Crockart argued proved a "mastery of saying very little and using lots of words to do it".

He said it was difficult to see if any progress was being made in a timely fashion, which Cable acknowledged as a possibly "fair" criticism.

"If the forum hasn't happened in the autumn when this steering group reports," Cable replied, "you have good grounds for coming to me and saying 'Why aren't you chivvying these people along, the report's been out there for a year or so – why is nothing happening?'"

However, Cable conceded that the investor forum itself could throw up a number of problems, with its goals of coordinated shareholder action "quite tricky" in practice.

"On the one hand," he said, "we are getting them to talk to each other, we are getting people to talk about the boundary between investment institutions.

"But of course we don't want collusion, we don't want insider trading – the worst form of conversation that could take place."

He said the good institutional investors had "very clear" Chinese walls in place to avoid such a conflict.

The minister also argued that the industry should invest in research to make the forum viable, as it could develop metrics required for reporting.

"There is an issue about how they charge their members for it, and how transparent that charge is," he said.

"We don't see this as the government's job, this is the industry's job – it is their own reputations at stake."

Cable also welcomed the Pensions Regulator's (TPR) new statutory objective – announced by chancellor George Osborne as part of the 2013 Budget – as requiring the TPR to think about matters other than mark-to-market concerns, as the mindset could otherwise involve the regulator "doing very damaging things to companies".

He also noted that the European Union had "major" responsibilities to cultivate long-term investing and welcomed its recent Green Paper on the matter, which he said embodied all of Kay's arguments and principles and could have been written by the UK academic.  

However, Omar Cordes, partner at Ownership Capital, questioned how effective the investor forum could prove.

"It's hard not to be pretty cynical when people talk about the need for more research and industry forums for an industry that is as broad as the investment management industry really is," he told IPE.

"Any time people talk about industry forums as a solution, it is right up there with education.

"Of course, in the long term, that kind of thing could be helpful, but I'm not sure it moves the needle, and I think it's a distraction, frankly.

He said Cable's suggestion for more research could be a good one, but that he was not sure it made sense to attempt to organise it across the industry.