BDO warns of RDR clash with European regulations
The FSA would find it “very difficult” to resist European regulations if they clash with RDR rules, accountancy giant BDO has warned.
Alex Ellerton, financial services partner at BDO, said it was important for the UK to maintain representation in Europe in the run up to RDR to ensure that it is not adversely affected by new regulatory regimes such as the Markets in Financial Instruments Directive (Mifid).
He said: “I hope in the midst of what is going to be a tumultuous year at a UK level that the UK is still able to represent itself in Europe so that RDR doesn’t get deleted by Mifid. It is not without precedent.”
Mr Ellerton added that the FSA “can’t divorce itself from the political move more and more towards Europe”.
The FSA has repeatedly maintained European laws will not disrupt its RDR plans, including the banning of adviser commission. The FSA has already received promises from Europe that it will be allowed to “carve out” some of the Mifid rules which contradict its own.
However, Mr Ellerton said there was a push within the European Commission – which sets the rules – to set “directly applicable regulations” rather than guidelines which local regulators can opt out of.
“Something set at a European level at the moment can latch on to the push for Europe to be able to set directly applicable regulations,” he said. “If [the EC] had the will to do that then the FSA would find it very difficult not to go along with it.”