The European Parliament has today voted against a Europe-wide ban on adviser commission in Mifid II.
MEPs approved a ban on commission for independent financial advisers but opted only for more transparency for other advisers.
The vote was overwhelmingly passed with 495 MEPs in favour, 15 against and 19 abstentions.
Last month, the Economic and Monetary Affairs committee, a powerful sub-grouping of MEPs, decided against the ban and now the entire EP has rubber-stamped the move.
There were fears that a decision not to ban commission at EU level could scupper the UK’s RDR plans but the FSA will be able to go above and beyond any rules if it wishes to do so.
MEP and ECON chair Sharon Bowles disagrees with the EP position and hopes a ban across Europe will be in place soon.
She says: “Citizens need to be sure they are getting the best advice for them, not being pushed in a direction for the adviser’s benefit. So ultimately, a total ban on inducements has to be the way forward.”
The proposed directive will move into trialogue negotiations between the European Commission, EP and Council of Ministers.
The UK and FSA have lobbied hard to get Europe to follow the RDR and introduce a total ban. Last month, Tory MEP Kay Swinburne blamed the Labour party for the “spectacular failure” as it voted against the moves in its socialist EP grouping.
The European Commission strongly favours a Europe-wide commission ban and is expected to continue to push for it in trialogue.
Earlier this month, European Securities and Markets Authority chairman Steven Maijoor called for the EU to ban commission across Europe.
Bloomsbury Financial Planning partner Jason Butler says: “I don’t think it should be European wide as you need to lead each member state to decide what they think is appropriate. But if someone passports into the UK they have got to follow the rules on commission.”