Labour MP George Mudie has questioned whether the FSA will be able to impose RDR rules on certain adviser passporting into the UK.
Responding to questioning from Mudie during the TSC’s evidence session on the RDR last week, FSA director of conduct policy Sheila Nicoll said the regulator will apply the RDR rules to anyone trying to avoid them by passporting into the UK.
Mudie said: “But you have to prove they are doing it and that is as hard as proving Hector is doing something deliberately to harm people. Passporting will knock holes in the RDR faςade.”
He also criticised the FSA for not indicating which parts of the RDR rules those passporting into the UK will be subject to.
Nicoll said passporting adv-isers who do not have an office in the UK will need to be authorised in their own country and some of those requirements, which are set out by Mifid, are “more stringent” than in the UK.
Federation of European IFAs chief executive Paul Stanfield says: “I think that might be a red herring, I cannot think of another EU member state with a more stringent authorisation process.”
During the TSC session, FSA chief executive Hector Sants defended moving ahead with the RDR at a time when the European Union is working on the packaged retail investment products initiative. He said “significant” levels of consumer detriment meant it was reasonable to push ahead with the reforms.