The Association of Independent Financial Advisers (Aifa) has warned intermediaries who give cross-border advice that they need to prepare for the implementation of The Markets in Financial Instruments Directive (Mifid) on 1 November.
MiFID means that, for the first time, investment advice must be regulated in all European Economic Area (EEA) States. This includes Spain, France and Cyprus where there is a large and growing ex-patriot community, many of whom are clients of UK IFAs. As a result of pressure from Aifa on the FSA, the EU Commission and the Treasury UK IFA firms secured an 'opt out' from Mifid.
This means that UK financial advisers are not automatically subject to full Mifid obligations. However, the FSA has now said that where a UK financial adviser is advising clients located in another EEA state it must ensure it satisfies the legal requirements of that state. It can do that by 'opting in' to Mifid and obtaining a passport for such services.
To operate cross-border IFA firms need to opt-in to the Mifid regime by applying to FSA for a Variation of Permission (VoP) and a Passport Notification. The cost of the VoP is £250.
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