APFA calls upon FCA to apply principle of proportionality

by | Jan 6, 2017

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The Association of Professional Financial Advisers (APFA) has called on the FCA to apply the principle of proportionality in implementing MiFID II.

What’s more, it says that the FCA should not lose sight of the recommendations made in the Financial Advice Market Review (FAMR) that the proposals do not make financial advice less accessible.

APFA has also asked the FCA to make it clear to advisers what is required of them and the specific steps that need to be taken to meet the regulatory expectations. Particularly, the association urges the FCA not to gold-plate the implementation of MiFID II’s telephone recording requirements as the necessity of a suitability report ensures there is a clear and unambiguous record of what is recommended to clients.


APFA’s Director General Chris Hannant said: “The taping measures are intended to combat market abuse and make sense in the context of trading conditions, where timing is crucial to the outcome and you need to know who said what and when. The proposals are disproportionate in an advisory context.

“The FCA has adopted a minimalist approach to implementation for the rest of MiFID II – this is sensible and proportionate. I don’t understand why they want to alter this policy in respect of recording calls for article 3 exempt firms.

“The existing rules already require adequate records to be kept for giving investment advice. ESMA’s guidance indicates that a written record is sufficient for a face-to-face meeting under MiFID II. I can’t see how a telephone call is any different. The FCA needs to adopt a proportionate approach.”


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