MEP calls for an unbiased impact review of MiFID II

Syed Kamall, member of the European Parliament for London, said he is “not impressed” with the European Commission’s assessment of the impact of EU regulation on the UK.

He has also called for an independent review of proposals to ban only ‘independent’ financial advisers from receiving commission payments.

Implementation of the proposals included in the draft rules of the Markets in Financial Instruments Directive (MiFID) II, would allow restricted advisers to continue receiving commissions from product providers. Only IFAs would be forced to charge clients a fee for their service.

Kamall, who sits as a member of the Economic and Monetary Affairs Committee, has called for a “proper assessment” to see if banning financial advisers from receiving commission payments from product providers would increase investor fees or put retail investors off investing.

“An assessment of this should have been carried out. I have not been impressed by the so-called “impact assessments” carried out by the Commission.

“Therefore, I and other MEPs will want to see independent assessments of the impact of the Commission’s proposals.

“If a definite conflict of interest is identified then this ban should apply to all advisers and not only IFAs,” he said.

The limited scope of the draft European rules undermines changes made by the FSA under the retail distribution review, which extends the ban to all advisers to create a level playing field.

Critics of the EC’s proposals, including the Treasury,  argue they unfairly favour the bancassurance-focussed European distribution market of tied advisers.