FCA considers full ban on DFM rebates

The Financial Conduct Authority (FCA) is seeking feedback on a possible ban on rebates from discretionary fund managers to clients as it develops its response to forthcoming MiFID II legislation.

In a discussion paper published today, the FCA has called for feedback on a variety of issues raised by the European legislation, including proposals surrounding discretionaries' use of third party commissions. As it stands, MiFID II will ban DFMs from accepting and retaining third party commissions, similar to RDR adviser charging rules - but does allow DFMs to receive payments if these are passed on to clients in full. This "in effect allows rebating", the FCA said - but the regulator has raised the idea of banning the practice in the UK. "We want to seek views on whether consume...