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MEPs vote against Europe-wide commission ban

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The European Parliament has voted against a Europe-wide ban on adviser commission under Mifid II.

Last week, MEPs approved a ban on commission for independent financial advisers but opted only for more transparency for other advisers.

There were fears 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 the rules if it wishes to do so.

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.

MEP and ECON chair Sharon Bowles disagrees with the EP’s 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 now 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.

The European Commission strongly favours a Europe-wide commission ban and is expected to continue to push for it in trialogue.

Bloomsbury Financial Planning partner Jason Butler says: “I do not think there should be a Europe-wide ban as each member state must decide what they think is appropriate. But if someone passports into the UK they should be forced to follow the rules on commission.”

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