Guidelines designed to help IFAs incorporate new rules under the Markets in Financial Instruments Directive (MiFID) into their businesses have been approved by the FSA.
The recommendations explain unfamiliar MiFID terminology as well as set out points firms might consider in assessing the suitability of their advice.
The FSA says it will consider a firm’s use of the guidelines when exercising its regulatory functions but adds following them is no guarantee against regulator action.
The guidelines are the latest of three similar documents produced by MiFID Connect, a joint project between 11 City trade associations designed to ease the transition from the current FSA rulebook to the incoming EU-wide requirements.
The British Bankers’ Association (BBA), one of the 11 trade associations and founders of the project, says guidelines approved by the FSA last week, entitled ‘Suitability and Appropriateness’ will likely be of most use to advisers.
Anthony Belchambers, chairman of MiFID Connect, says: “The regulator’s process for recognising industry guidance such as this is making a valuable contribution towards helping firms come into compliance with what is a broad, far reaching and principles-based directive.”
Michael McKee, BBA executive director, says advisers would benefit from the guidelines.
“The FSA’s line would be: ‘You’re not obliged to follow this but it will help your case’,” he says. “They’d say it’s not a safe harbour but a sturdy breakwater.”
Adams Richard Grove, spokesman for the FSA, says: “If a firm can show it’s followed the guidelines in the way intended, we’ll see that as complying with our requirements.”
Angela Knight, chief executive of the BBA, says: “The clock is ticking for financial services firms across Europe.
“In the UK, the industry and its regulators are working together to ensure we are the best placed in Europe to benefit from the opportunities to come after November 1st.
“Through its guidance, MiFID Connect has helped to ensure the UK financial services industry will hit the ground running.”
The guidelines are free and available from both the BBA and MiFID Connect websites.
To comment on this story contact:
Tel: 020 7034 2679
E-mail: [email protected]
Company results round-up
Tim Berners-Lee’s ‘Solid’ project
963 IFAs surveyed
Our weekly heads-up for advisers