The FSA says it will keep a close eye on firms using passporting rules as an attempt to circumvent the RDR.
Firms in the European Economic Area can passport into any jurisdiction within the EEA as long as they comply with the rules in the state they are based in.
The FSA’s formal response to the Treasury select committee’s RDR report, published this week, accepts the committee’s call for the regulator to ensure passporting is not used to avoid RDR requirements.
It says: “We have processes in place to identify and monitor individual advisers who move to another EEA jurisdiction and passport back to avoid the RDR rules.
“Where we have concerns over individuals’ competency or propriety, we will conduct our own investigations or refer them to the relevant EEA supervisor.”
European regulations such as Prips and the Mifid II directives are being developed which could have an impact on the final shape of the RDR.
The FSA says it will work with the European authorities to ensure compatibility with the RDR. It says: “Where necessary we will seek to influence the EU agenda to ensure UK interests are protected and enhanced.”