Written answers

Wednesday, 5 October 2011

Department of Finance

Financial Services Regulation

9:00 pm

Photo of Patrick O'DonovanPatrick O'Donovan (Limerick, Fine Gael)
Link to this: Individually | In context

Question 66: To ask the Minister for Finance in view of unsound investments that have been made in recent years, the regulations that are in place for financial advisers. [27810/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

I assume that the Deputy is referring to financial advisers who provide advice to consumers in relation to investment products. The main regulations governing financial advice in relation to the sale of investment products are set out below.

1. Markets in Financial Instruments Directive (MIFID), 2007

This EU Directive provides harmonised regulation for the provision of investment services across the 30 member states of the European Economic Area. The main objectives of the Directive are to increase competition and consumer protection in investment services. Included in MIFID are regulations governing conflicts of interest, conduct of business obligations when providing investments services to clients, provision of information to clients, portfolio management, handling of complaints and assessment of suitability and appropriateness.

2. Life Assurance (Provision of Information) Regulations, 2001 These regulations apply to the sale of all life assurance polices sold after 1 February 2001. The Regulations set out the information that must be provided to the consumer prior to signing a proposal form and at the policy "cooling off" stage. The information provided includes details such as the projected benefits, charges and commissions, as well as other general product information.

3. The Central Bank's Minimum Competency Requirements

These requirements were introduced in 2007 to establish a minimum standard of knowledge for financial firms providing services to consumers. A revised Minimum Competency Code was published by the Central Bank on 1 September 2011 and it will come into effect on 1 December 2011.

Finally, the Central Bank's Consumer Protection Code includes provisions that, when providing a product or service to a customer, a financial institution must comply with the 'Knowing the Customer' and 'Suitability Provisions ' of the Code. This process involves, inter alia, gathering relevant information from the customer about his/her financial situation, individual circumstances and needs. The revised Code, which will come into effect on 1 January 2012 contains a chapter on investment products.

Comments

No comments

Log in or join to post a public comment.