18 September 2007

Article 4 of MiFID's Level 2 implementing Directive limits the scope for Member States to apply additional requirements in certain of the areas covered by MiFID. It sets out the conditions for creating or retaining such national requirements that go beyond MiFID and requires that these be notified and justified to the European Commission.

As we said in our July 2007 policy statement PS07/14, Reforming Conduct of Business Regulation - Final Feedback on CP06/19, we have reached agreement with the European Commission on those measures where retention would be consistent with the purposes of MiFID, and where notification would be fully consistent with the criteria in Article 4. These cover measures in the following areas:

  • The conditions advisers have to meet to call themselves 'independent';
  • The provision of a simplified prospectus (SP) or key features document (KFD);
  • The disclosure of actual commission and commission equivalent in relation to the sale of packaged products; and

  • The use of dealing commission.

The Commission have indicated that some of these measures may not strictly require notification under Article 4, but may fall within the discretion available to a Member State when implementing a directive. However, in these cases we judge it prudent to notify on a precautionary basis. The Treasury has now made the formal notifications on our behalf and has put them on their website. Note that these replace the 31 January 2007 notifications, which have now been withdrawn.

Article 4 notifications