Ireland: New requirements for financial intermediaries to disclose commission arrangements
The Central Bank of Ireland (Central Bank) has published rules on payment of commission to financial intermediaries.
The new rules, to be included in the Consumer Protection Code 2012 on payment of commission to financial intermediaries, aim to ensure transparency of commission arrangements between financial intermediaries (brokers and financial advisers) and product producers (banks and insurance firms).
The rules are also intended to minimize the risk of conflicts of interest relating to commissions arising when consumers are getting financial advice from financial intermediaries.
Under the rules, the Central Bank will require intermediaries to publish details of commissions they receive from product producers on their website.
Intermediaries describing themselves and their regulated activities as ‘independent’ where they accept and retain commission for advice provided to clients will no longer be permitted.
Certain criteria must be met in order for commissions to be acceptable. According to the regulator, commission linked to targets that do not consider a consumer’s best interests will be deemed a conflict of interest and will be prohibited.
The new rules will become effective on March 31, 2020.