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IFA faces Dutch threat over passporting fee

Philip J Milton & Company is being threatened with legal action by the Dutch regulator for unpaid Mifid fees despite never having had any clients in the Netherlands and only being registered under the passporting scheme for two months.

Director Mark Millichope says the company applied for authorisation for all European jurisdictions when the Mifid rules came into effect in December 2007 to keep in touch with clients who move abroad. He says the company has never had any clients resident in the Netherlands.

Dutch regulator, the Autoriteit Financiële Markten, is the only one to have asked for any payment and Millichope says the company cancelled its application to the Netherlands in February 2008 as soon as it realised that there would be a cost involved.

Since then, AFM has been chasing payment of £207 in unpaid fees, culminating in a solicitor’s letter received this month threatening court action.

Millichope says: “It was a bit of a shock and during what has been a tough time in the business we have wasted time on this that would have been better spent on something else.”

He says he has been in touch with the FSA over the matter but it has been unable to help.

The FSA says this is a dispute between the IFA and the Dutch regulator and it is not able to intervene.

A spokesman says: “Firms need to be aware of the implications of passporting into another jurisdiction.”

Millichope says he understands there are several hundred firms that are in a similar position but the FSA says it is unable to comment on how many firms are affected.

Since the beginning of this year, the FSA has told any company applying for the passport that there is a charge from the Netherlands’ regulator but Millichope says when he applied in 2007 there was no advance warning of a fee.

Millichope says: “It is more the principle of the matter than the amount. AFM have advised we can appeal against the amount of the charge but we have been told we will need to pay a fee for any appeal.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. IFA faces Dutch threat over passporting fee
    I woudl rather pay £207, have lthe license and avoid the stress. Clearly some always argue on ‘principle’ – I cant handle any further stress on top of trying to run a practice and survive and keep a clean credit history

  2. Us too
    They tried to charge us as well, we just ignored them and cancelled the Netherlands passport. I know they have tried it on with lots of IFAs.

  3. IFA faces Dutch Threat
    I have some sympathy for the IFA and his integrity in obtaining passporting rights into EA states. The fee is a one off. It was only £157 and is for administration. It is in the small print but NOT in the FSA’s Guide to Passporting. (Imagine a Suitability Letter where you did not point out the risks? Such rules do not apply to the FSA). Other countries are considering imposing a similar charge. Question – does the FSA apply such a charge for Dutch firms passporting into UK? Advice – only passport into those countries where you can expect to give advice – e.g. France, Spain, Holland. Incidentally, I complained by email and within 15 minutes got a personal call from a knowledgeable and sympathetic Dutch regulator. FSA please note. Pay it and move on.

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