European politicians reject commission ban
European politicians reject plans for commission ban, making the FSA look increasingly isolated in Europe.
European Commission plans to ban investment commission across the continent have taken a blow in the European Parliament, making the FSA’s RDR stance look increasingly isolated.
MEPs who sit on the economic and monetary affairs committee yesterday finalised a series of amendments to the Markets in Financial Instruments Directive (Mifid).
They voted for a Mifid rulebook that includes requirements for firms selling investment products to remove conflicts of interest from their remuneration packages.
But, crucially, they voted against a total ban on inducements for fund distributors, as will be the case in the UK from December 31 under the FSA’s RDR clampdown.
The politicians did vote in favour of increased transparency at the point of sale, requiring advisers and other distributors to explain fully how they have been paid, and by which parties.
The committee also included requirements for investment product providers to ensure their products “meet the needs of a defined category of clients”.
The amendments will be put forward to the rest of the European Parliament in October, in accordance with the three-pronged approach to regulation on the continent.
The final version of Mifid, expected early next year, will combine the European Parliament’s amendments with those from the European Council - formed by representatives from national regulators - alongside the initial proposal from the European Commission.
German MEP Markus Ferber first took steps to remove references to a commission ban in March, and there has been significant opposition to the ban, proposed by the European Commission, from both advisers and fund managers on the continent.