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New hope over Mifid II ‘complex products’ rules 

March 24, 2016

Dave Baxter, FT Advisor

Industry trade bodies have reiterated calls to overhaul Mifid II proposals that treat non-Ucits products as ‘complex’ instruments, amid signs European regulators may be close to backing down.

As part of the regulation, due to come into force in January 2018, non-Ucits products such as investment trusts and many multi-asset funds would be designated as complex. This means retail investors seeking to use these products would need to complete a questionnaire on the risks involved.

Some fund groups have considered converting their multi-asset funds into Ucits vehicles so as not to jeopardise retail business. These moves would limit the products’ investment scope, potentially hurting intermediaries who use them as a diversification tool.

Hopes have been raised, however, that the Mifid rules may be relaxed.

One individual familiar with the discussions, who wished to remain anonymous, said a leaked version of the European Commission’s forthcoming delegated acts suggested the approach could change.

Similarly, the minutes of a recent FCA round table with trade bodies on Mifid II implementation noted reports of “possibly narrowing the scope of instruments judged to be complex for the purposes of the appropriateness test”. Read more

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