The government is considering the ability of financial advisers to advise on social investments as part of an effort to boost activity in the area.
Peers including Lord Hodgson, the former chairman of Tenet Group, and Baroness Kramer, raised the issue during a debate in the House of Lords on the Financial Services Bill on Tuesday night.
They were attempting to introduce amendments to promote and encourage social investments, and pointed out the regulatory worries or burdens which currently prevent advisers from dealing with this asset class.
Lord Sassoon, the commercial secretary to the Treasury, agreed with this concern, but insisted it was not necessary to deal with the matter in the Financial Services Bill.
He said: "It is one of several regulatory issues that are currently being considered by the Cabinet Office review.
"Therefore, there are other avenues through which these issues are being actively considered, as they should be."
The Cabinet Office is set to publish a publish a paper addressing social investments in the autumn.
>>Find out why financial planners could become the 'gatekeepers' to social investments HERE < <
As Baroness Kramer explained earlier in the debate, the sticking point for advisers was that, with the asset class still in its nascent stages, there was a lack of regulatory clarity.
"It is not clear, for example, that an independent financial adviser can advise a client on a social investment because the return is a combination of some sort of more traditional manner of financial return, but also of a social benefit-and how is that to be measured?" she asked.
"More to the point, how is it to be set within the suitability requirements that financial planners have to observe when they advise clients?"
With debate on the issue running until after 10.30pm, the proposed amendments were eventually not moved.
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