FECIF blasts Barnier in letter pleading for rethink of EU regulatory processes
FECIF, the Fédération Européenne des Conseils et Intermédiaires Financiers, has complained bitterly in a letter to Commissioner Barnier about plans for further European regulation it says will force its members out of work.
Dear Commissioner Barnier,
We acknowledge receipt with thanks of your letter dated 22nd March which has been abundantly commented by our members at the occasion of our Annual General Meeting held in late April.
Unanimously our members have confirmed their full support to Mr. Markus Ferber, MEP report and the proposed amendment of the EC proposal for a full ban on commission and inducement.
We strongly feel that the European Parliament is right in opposing a highly anti-democratic planned measure.
FECIF has repeatedly complained about the fact that no one single representative of the financial intermediaries has been appointed to the so-called stakeholders’ groups of the three super agencies created by the EC.
We are of the opinion that the bureaucratic oligarchy supervising the financial services industry has succeeded to prevent a true dialogue between the actors which is viewed by our members as another mockery of democracy.
It sometimes seems that the main purpose of new financial services regulations is to make the life of the SME intermediary ever more complicated, while at the same time diverting profitable business from Europe to other places outside Europe.
The Luxembourg life insurance industry has witnessed collection of premium down by 34% in 2011 when Singapore life insurance industry was increasing its collect by 25%.
In the meantime the Luxembourg government through a new law proposal wants to get rid of SME insurance intermediaries by imposing a minimum capital requirement of € 125,000 which has never even been contemplated in the new IMD draft.
In 2011 AuM in Europe decreased from €8.1 to €7.7 trillion. This erased the gains made in 2010; in 2011 UCITS experienced net outflows of €90 billion together with an unprecedented wave of new regulatory policies, which represent the only reaction of the EC to the crisis: more than 30 regulatory initiatives that have a direct or indirect impact on the asset management industry.
I take the liberty to remind you that China economy is supported by 7 million SME’s accounting for 70% of the China GDP.
However, it seems that for the EC, “big is beautiful” and we understand that our members should take as a model for good compliance, excellent governance and high ethic what is the privilege of some “big and beautiful” institutions whose integrity is undisputable according to the Press.
The path to hell is often described as one paved with good intentions. It seems the case with the current Tsunami of regulation hitting the financial services industry with no benefit whatsoever for the consumer but an increase in cost and useless additional unwanted procedure.
Should not we think at this stage that overregulation, gold platting and excessive compliance may explain the growing populist vote across Europe and a growing anti-European feeling?
The end result of this strategy is restructuring, recruitment freezes and job cuts and consolidation, the risk that a number of SME providers will exit the market; reduce competition among distribution channels as well as the number of products and services offered by distributors.
Our association is very concerned by the inflexible position taken by the EC as part of the review of the MiFID and IMD calling for a ban on payment of commission and/or inducements to intermediaries.
There is no other example in the past of a prohibition imposed by the European Commission to a sector to get a proper remuneration for a job performed under an already extremely strict regulatory environment.
In this respect, we stress the importance of providing equal protection to investors, regardless of the type of intermediation they use.
Appropriate information is an important part of investor protection regulation. Conversely, over-regulation of a sector already under tough supervision appears meaningless.
We therefore strongly urge you to avoid pushing some 200 to 300,000 European intermediaries out of work thanks to the provisions in this regulation.
We would welcome the opportunity to discuss these issues further.
Chairman of the Board