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UK can press ahead with full commission ban, says EC

Author: IFAonline

IFAonline | 07 Nov 2011 | 07:49

Categories: Regulation| Europe

A UK ban on the payment of commission from providers to advisers who sell its products can go ahead unchanged and unhindered, the European Commission (EC) has said, quashing concerns a Europe-wide directive could scupper the requirements.

According to an unnamed EC spokesperson quoted in the Financial Times, the Retail Distribution Review (RDR) is expected to be “compatible” with the MiFID II directive, which was published last month and includes proposals on banning inducements for independent advisers but makes no mention of non-independent distribution models.

There had been concerns the directive would threaten the RDR, which will ban all commission payments from providers to advisers, tied or independent, from the beginning of 2013.

However, the apparent omission of tied advisers from MiFID II may have more to do with the fact non-independent models dominate the advice landscape in most EC nations.

UK stakeholders, including the Investment Management Association and the Treasury, had expressed concerns over the content of MiFID II.

But the EC has suggested the RDR rules will be unaffected by MiFID II.

“While requirements under the new Mifid will have to be implemented [on a] national level, member states could be able to cater for additional requirements," a spokesperson said.

“The approach adopted by the UK does not seem incompatible with the revised Mifid rules.”

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