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FSA warns on European approach to regulatory reform

The FSA has raised concerns about the European Commission’s “two-pronged approach” to delivering its packaged retail investment products initiative, saying it could allow different selling standards across markets.

Speaking at the Chartered Institute for Securities & Investment annual conference in London this week, FSA director of conduct policy Sheila Nicoll said the regulator supports the commission’s aim of creating a level playing field for competing retail products.

But she explained that the commission plans to deliver its Prips initiative through a combination of reviews of Mifid and the insurance mediation directive. Nicoll said: “We do have some concerns over the fact that the commission is wanting to deliver Prips through this two-pronged approach – on the one hand, through Mifid and on the other hand, through the IMD, depending on the product or service that is being offered.

“We fear this could result in divergence, allowing different selling standards to be applied across different markets, which of course would defeat the original objective of the proposals.”

Responding to Nicoll’s concerns, European Commission internal market and services division spokeswoman Chantal Hughes says November’s consultation on Prips was aimed at ensuring stronger consistency and effectiveness in the consumer protection rules applying in the EU retail investment market.

She says: “Consultation responses largely supported the broad approach outlined, including using the Mifid and IMD frameworks as a basis for aligning sales rules for Prips. The commission is now considering responses to the consultation and developing final proposals.”

At the CISI conference, Nicoll also argued that proposals within Mifid to ban inducements only where they are paid to independent financial advisers risk distorting the market and, as a result, the FSA is pushing for a ban on inducements for all advisers.


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Oh Dear,

    Its a bit alien having to pay attention to the views of others.

    “Exterrrminate Exterrrrminate”!

  2. If she want a level playing field then we wouldn’t have the RDR!

  3. Exasperated me 16th June 2011 at 1:35 pm

    Apart from ‘simplified advice’?

  4. Oh Dear — I can see certain people in their Ivory Towers within the FSA getting twitchy about their jobs. Level playing field with a gigantic slope towards RDR and oblivion for the industry in general. Can I suggest they make this more complicated for the public

  5. If I wasn’t an Officer & Gentleman IFA, with standards to uphold, I might use some choice words for Ms Nicoll, she is intent on putting IFA’s out of business.

    The differing standards are allready there… IFA over 70% of retail distribution with1.5% FOS complaints
    Banks over 64% of complaints with less than half of IFA distribution.
    But of course Ms Nicoll knows all about being an IFA doesnt she!

  6. Be fair, no one with half a brain could fail to recognise what the FSA has achieved here.
    Who wouldn’t want to learn from the FSA’s approach?
    Are we not all united in our opinion of how they regulate?
    Must stop now, I need to give my dog it’s breakfast.

  7. RICHARD WRIGHT 17th June 2011 at 9:00 am

    mifid ? IMD ? Prips?
    what the hell are u talking about? I havnt a clue what these things are speak english!!

  8. Julian Stevens 20th June 2011 at 9:48 am

    So the FSA is “pushing for a ban on inducements for all advisers”? It seems to many of us that what the FSA is really pushing for is the eradication of any profitability in being an adviser. We’re expected to do more and more for less and less, with relentlessly escalating reporting requirements of everything we do AND (under threat of confiscation of our livelihoods if we don’t) we’re required to pay ever more to the unaccountable leviathan at Canary Wharf (and its offshoots) for the privilege.

    How about giving us a break, not least in view of our ever improving and now really quite tiny level of complaints? How about the FSA trying to a better job with LESS of our money? How about some constructive engagement with an industry now punch-drunk with 20+ years of incompetent, biased and self-serving regulation?

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