Mifid halts FSA moves to cut regulation

The FSA’s bid to strip back reg- ulation has been dealt a body blow by the EU’s markets in financial instruments directive.

The regulator, due to publish industry feedback on propo- sals to streamline the training and competence and approved persons regimes last week, has put its plans on hold while it waits for the final Mifid level two rules from the EU.

The consultation paper inc-ludes controversial proposals to scrap “customer-controlled functions” for firms dealing with retail or wholesale customers, shifting the responsibility to them rather than the regulator to vet any new app-roved persons.

FSA spokesman Robin Gordon-Walker says changes made to the original Mifid rules since the FSA issued its consultation paper last July have made it impossible to make reforms.

The FSA will publish feed- back once the EU has made its position clear and Gordon-Walker says this could be months or weeks.

He says: “We remain committed to these plans and will implement them if possible. We did not want to change the rulebook, only to change it again when the final rules are announced.”

But CII group public affairs director John Ellis says: “Scrapping these rules undermines the FSA objectives to protect consumers and could lead to more claims falling on the FSA. The project to reduce regulation should not centre on rules that provide protection for consumers.”