The European Commission says it expects the RDR to be compatible with Mifid II despite the current draft of the new directive only focusing its proposed commission ban on the independent sector.
In a draft of the directive, published last month, the EC stated that its ban on commission would only extend to independent advisers. This would mean the FSA would have to apply to gold-plate the directive to ensure it can extend its commission ban to all advisers.
In an interview with Financial Times publication Ignites Europe, an official from the EC suggests an RDR ban on all advisers receiving commission would be possible.
The Commission says: ‘While requirements under the new Mifid will have to be implemented on a national level, member states could be able to cater for additional requirements. The approach adopted by the UK does not seem incompatible with the revised Mifid rules.”
Trade bodies and the Treasury have raised significant concerns that Mifid II could undermine the RDR if the UK was unable to extend a commission ban to all advisers.
The UK, Denmark and the Netherlands have all produced their own rules on banning commission which would go further than the wording of the Mifid II directive. Other countries, such as France, are unhappy with the new rules.
Mifid II negotiations will now move to the European Parliament.
Industry experts have previously warned that although the EC may be accepting of the FSA’s RDR case, it may be harder to convince the European Parliament.