In his article, Ian Williams discusses what implications the transition to IMD2 will have for the manufacture and distribution of retail financial products.

The new “IMD 2” will ensure direct insurers (and reinsurers) fall within the scope of IMD. It will also deal with new business models such as aggregators or price comparison websites.
 
The Commission is looking in detail at the retail market to see if there is a ‘level playing field’ between competing (or substitutable) products in terms of consumers' best interests. In reality, the Commission (and some political stakeholders) are concerned that having different regimes creates a risk of arbitrage, where market participants structure products so as to minimise their regulatory obligations. IMD2 will influence and be influenced by both the MiFID review and the Packaged Retail Investment Products (PRIPs) initiative.
 
Because of these linkages, the IMD review should be of interest to all providers, distributors and advisers of financial services, as it highlights current thinking of the Commission and national regulators on key, politically-sensitive issues that have gained prominence since the financial crises. These include consumer protection, transparency, conflicts of interest, suitability of advice, general good obstacles and disclosure of remuneration.
 
This could have serious implications for the final shape of the Retail Distribution Review in the UK.

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