According to the latest draft of the European legislation, which is due to come into force by 2015, the ban on commission would only apply to independent advisors but payment will still be allowed for those which fall outside of this bracket.
The proposals appear to be in direct contradiction to the FSAâs plans to implement a total ban on the practice by 2013.
However, Sheila Nicoll, FSA head of conduct policy, told an industry conference that she was pleased to see the âsimilaritiesâ between the proposals and how âcompatibleâ they both are.
âWhile the MiFID II proposals explicitly provide for a ban on commission when firms describe their advice as âindependentâ, the draft directive does not prohibit regulators from going further. In the UK we will already have banned commissions set by product providers - for advisers of all types - when MiFID II comes into force,â she explained.
MiFID II is an update to a piece of legislation originally published in 2007 and is designed to change the regulation of trades in the financial services sector.
By Jim Ottewill