Mifid product powers could hit national regulators
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Legal experts are warning that powers proposed under Mifid to ban products at a European level add uncertainty for firms and could serve to undermine national regulators.
The European Commission published its consultation for the review of Mifid, also know as Mifid 2, in December. Final proposals are expected later this year.
It proposes that where national regulators fail to act, or do not take sufficient action to address a threat to financial stability, the EC should have the power to step in and temporarily ban or restrict the trading or distribution of complex products, such as certain types of structured products.
Law firm Dundas & Wilson partner Patrick Brandt says: “This adds another layer of uncertainty and it is not clear that the European Commission needs these powers.
“How would providers liaise with the commission in relation to particular products? The best model is to have clear national regulation.”
His comments follow a recent letter to the EC from the financial markets law committee, an independent committee of legal experts.
The committee is concerned that the EC’s proposal would remove legal certainty for national regulators and firms.
Jamieson Financial Management principal Bruce Jamieson says: “We have to get away from this ridiculous European influence, as other European countries do not have the same financial services market as the UK.”
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