Adviser firms should not see the Markets in Financial Instruments Directive (MiFID) as a threat but as an opportunity, the FSA's director or retail policy Dan Waters said today.
Speaking at the Insurance Institute of London, Waters said the directive offers firms the chance to expand via cross-border business. However, he admitted most firms remain nationally-focused.
Waters also said MiFID fits in “pretty well” with the FSA’s conduct of business (COBS) regime - which was introduced simultaneously with MiFID on 1 November last year - and says he does not believe the directive will undermine any outcomes of the Retail Distribution Review (RDR).
“I think MiFID creates a framework that provides more potential for commercial opportunities,” he said.
“Within this framework for opportunity, one thing that has changed in the retail space is that investment advice has become authorisable in every Member State and as a result also passportable.”
Waters also said the implementation of COBS has been virtually seamless with that of MiFID.
“In other areas of conduct of business, MiFID implementation sat pretty well with our parallel initiatives to simplify our conduct of business rules for investment business, and to use the new COBS as a flagship for more principles-based regulation.
“Overall, MiFID is fairly principles-based.”
On the issue of the RDR, Waters also said the FSA has already factored in any possible effects MiFID may have.
“It is premature to speak of MiFID or indeed any other directive as presenting an insuperable barrier for the RDR,” he said.
“You may well be asking how on earth this crowded EU agenda sits with our own RDR. Indeed, some of you may be wondering whether EU initiatives could undermine any conclusions we draw from the RDR - for example, in relation to ideas such as Customer Agreed Remuneration, Primary Advice or professional standards. Well I don't think so.
“When we published the RDR paper in June, we were at pains to set out at some length that any new regulation arising from the RDR, or the removal of regulatory barriers, will need to be compatible with these requirements of relevant EU Directives – just as they will need to be compatible with other domestic legal considerations such as tax law, competition law and general law.”
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