EU executive says no decision yet on financial sector commission ban
LONDON, March 22 (Reuters) - The European Union's executive said on Wednesday that upcoming plans to bolster retail investor protections will be "ambitious", but any ban on banks offering commission in return for business from financial advisers has yet to be decided.
The European Commission in the coming weeks is due to propose its "retail investment strategy" to deepen its capital market, a step made more urgent by Britain's exit from the bloc.
"The issue here is that we need to protect retail investors if we want them to invest and entrust their savings to the capital market," John Berrigan, head of the commission's financial services unit, told an Alfi funds industry conference.
"It should be ambitious and laser focused on the interest of the retail investor."
His boss, EU financial services commissioner Mairead McGuinness, has suggested that inducements or commission offered by banks to financial advisers who send business their way should be banned to end a conflict of interest and cut fees.
But banks, insurers and several EU member states including Germany and France have lined up to oppose banning such inducements which are widely used in investment product sales.
"This has become a bit of a hot topic," Berrigan said. Industry officials talk of the idea of a ban being dropped or introducing over many years.
"We are assessing different options to assess the problems that we have identified, but I should stress that no final decisions on any of these options have been made yet," Berrigan said.
He also said the commission will set out its assessment of what more can be done to make money market funds more resilient to market shocks in a report later this year after calls from EU regulators for speedy action.
The EU executive is undertaking a "comprehensive assessment" of whether new environment, social and governance (ESG) disclosure rules for being rolled out, known as SFDR, provide legal certainty for asset managers amid confusion on how to apply them.
"We plan to launch a public consultation in the second half of this year," Berrigan said. Any follow-up legislative proposal would be for the new commission from late 2024, he added.
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