View more on these topics

MEPs vote against Europe-wide Mifid II commission ban

European Union EU flags 480

The European Parliament has voted against a Europe-wide ban on commission in its Mifid II regulation.

In the vote in Brussels yesterday, the Economic and monetary affairs committee fell short of proposing a commission ban and instead suggested a ban on investment firms remunerating their staff or assessing their performance in a way that might create conflicts of interest with the firm’s clients.

There were concerns that by allowing commission within the EU, the FSA would need to obtain an exemption to ban it under the RDR. In July, the House of Lords European scrutiny committee called on Mifid II to ban commission.

The EP’s proposals also include requiring investment advisers and sales people to possess an “appropriate” level of knowledge of the products.

Firms designing investment products for sale to professional or retail clients must ensure they meet the needs of a defined category of clients. They will also be required to take reasonable steps to ensure that the product is sold to the right kind of client.

Speaking at the Liberal Democrat conference in Brighton this week, MEP and Economic and monetary affairs committee chair Sharon Bowles said the vote will not affect the RDR.

She said: “We can’t just ban certain models in member states because if you throw everything up in the air it creates chaos.

“There is nothing in it stopping us doing the RDR, it is just that the rest of Europe might not be doing exactly the same. It is not mandating commission but because of the maximum harmonisation rules in capital requirements directive IV everyone suddenly thinks there will be regulations, but it will not work that way.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Well this woman certainly knows some very large words, an indication to me that she has not got a clue what she is talking about.
    I understood that harmonisation was just that, all singing from the same sheet etc.
    Typical polititian.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com