03 Nov The FSA Insist Commission Ban Implemented in RDR Won’t be Overturned by Mifid II Reforms

The Financial Service Authority are insisting that the ban on commission under the new RDR will not be overturned by the upcoming Mifid II reforms that are being implemented by the European Commission. Under Mifid II, a ban on commission would only apply to independent advisers, with non-independent firms still able to take a commission for their services. However FSA director of conduct policy Sheila Nicoll claims the reforms will be more far-reaching than that and will preserve the FSA's outright ban on commission, which comes into force alongside the RDR in 2013. She commented "While the Mifid II proposals explicitly provide for a ban on commission when firms describe their advice as 'independent', the draft directive does not prohibit regulators from going further. "In the UK we will already have banned commissions set by product providers – for advisers of all types – when Mifid II comes into force. "The concerns that led us to develop the RDR remain valid in the UK, and may also be shared by some other regulators in respect of their national markets. Given this, it may yet prove that other member states are also interested in restricting inducements for all firms that give advice, while remaining in conformity with Mifid II."