Today the EU Commission tabled proposals to revise the Markets in Financial Instruments Directive (MiFID). The proposals aim to make financial markets more efficient, resilient and transparent, and to strengthen the protection of investors.
One of the proposals to improve investor protection, envisages that independent advisors and portfolio managers will be prohibited from making or receiving third-party payments or other monetary gains. This measure should help prevent potential conflict of interests.
Consumer organizations applaud and call these proposals a “Milestone in financial consumer protection.” Gerd Billen, Executive Director of the German Federation of Consumer Organization, argues: “Citizens do no longer tolerate that banks prosper on their costs.” At the same time he called upon the German government to change course und demanded that the new rules should not only apply to independent advisors and portfolio managers but also to regular bank staff.
Also the Director General of the European Consumers’ Organization BECU, Monique Goyens, supported the proposal. She said: “Commissions, sales targets and remuneration schemes give wrong incentives to bank staff and intermediaries. Such practices ultimately profit banks and insurance companies, but much less the consumers who are being sold a bad product. When I invest my savings to guarantee my children’s education I want advice on what is best for me and not for the bank or sales person’s own profit margin.”
Further information: europa.eu/rapid/pressReleasesAction.do, www.vzbv.de/go/presse/1538/index.html and http://docshare.beuc.org/docs/1/ONHCOMJDGLOFFBLGOLEGFIIDPDWY9D7WG39DW3571KM/BEUC/docs/DLS/2011-09847-01-E.pdf
Sources: EU Commission, vzbv and BEUC