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MiFID signals inducements endgame for UK asset managers 

November 5, 2015

Compliancy Services

The Markets in Financial Instruments Directive II will introduce the most vigilant stance possible on UK inducements, according to the Investment Association (IA). It will address all concerns from European regulators that rules in this area are not being followed.

MiFID stated that any inducements should have the effect of enhancing the quality of service to the end client. However, amid concerns that this was not happening in practice, MiFID II states that portfolio management firms such as discretionary investment managers may no longer accept and retain any commission. This further acts as an extension to the Financial Conduct Authority's ban on such payments to advisers, introduced under the Retail Distribution Review.

Furthermore, MiFID II specifies that minor non-monetary benefits payable to advisers are limited exclusively to information relating to a financial instrument or investment service, training events, hospitality of a minimum value, and other non-monetary benefits. 

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