The UK's Retail Distribution Review could be in danger of being overridden by the EU's MiFID II directive.
Nearly four years of negotiation has culminated in the EU’s Markets in Financial Instruments Directive II, or MiFID II, welcomed widely in the financial sector this week. The negotiation was under pressure to reach an agreement in time to finalise the text ahead of the European Parliamentary elections in May.
But UK financial advisers could face new changes in regulation under the RDR depending on whether or not the EU-level directive will over-rule national regulators.
RDR survival ‘unclear’
The EU agreement leaves UK regulators with the task of interpreting the impact of MiFID II on their year-old regime.
“MiFID and the RDR have different definitions of independent and restricted services, which could mean the UK has to change its rules again barely a year after a significant overhaul,” John Barrass, deputy chief executive of the Wealth Management Association (WMA), said.
He added that the agreed MiFID II appears to permit an override by national regulators to enable them to continue to impose their own rules, but whether that means the RDR will survive is unclear.