The European parliament wants to scrap a Mifid II proposal to ban commission for independent financial advisers across the European Union.
European Commission proposals for Mifid II, published in October, would ban commission for advisers operating on an independent basis.
In response to the commission’s plan, published last month, the parliament proposed an amendment requiring advisers to simply disclose any commission to clients.
Cicero Consulting Brussels analyst Tim Gieles says if the parliament’s amendment is accepted, the FSA will need a carve-out to ensure RDR regulations banning commission could continue. He says: “The FSA got a carve-out on the first Mifid and would need a similar one for Mifid II.”
The FSA is confident it will have discretion to continue the commission ban, whatever the outcome of the directive.
A spokesman says: “While Mifid is often described as a ’maximum harmonisation’ directive, it is a directive and not regulation, which means individual countries still have to write their own rules to implement it.
The parliament’s response also puts forward an amendment to remove the obligation for advisers to disclose whether their investment advice is independent.
German MEP Markus Ferber, acting as rapporteur, says advisers should instead “clarify the basis of the advice they provide, notably the range of products they consider in providing personal recommendations to clients, whether the investment advice is provided in conjunction with the acceptance or receipt of third-party inducements”.
EA Financial Solutions managing director Minesh Patel says: “The UK tried disclosure and it was not enough. The RDR commission ban is needed to rebuild trust in our industry.”