The European Commission has proposed the introduction of a compulsory French examination for all EU asset managers and advisers, in a last minute addition to the Markets in Financial Instruments Directive II (MiFID II).
Set for implementation by the European Securities and Markets Authority (ESMA), Commission officials told the European Parliament that the new guidelines will guarantee a common understanding between European investors, advisers and asset managers, who often sell cross-border products.
In particular, investment advisers and asset managers will be tested on whether they can explain market movements in French, and how a client's portfolio has performed in recent months.
Wealth managers warn MiFID II reporting demands will raise costs
Speaking this morning, a representative MEP said: "Pendant trop longtemps, les investisseurs européens ont été vendus des produits qu'ils ne comprennent pas de conseillers provenant de pays étrangers. Principalement le Royaume-Uni.
"La proposition d'aujourd'hui fera en sorte conseillers ne peuvent plus se cacher derrière les barrières linguistiques afin de vendre l'investissement ombragé."
The complexities of MiFID II compliance have already led the directive's implementation date to be pushed back a year to January 2018, and today's news is likely to cause additional stress for many market participants, with one source describing the level required as "somewhere between GCSE and A-Level standard".
Industry bodies are already discussing the preliminary introduction of a French-language academy for advisers in response to the new requirement.
However, it is understood advisers and fund groups may have to fund the service through an additional levy.
The proposals may provide further ammunition for those in the City who want the UK to vote to leave the EU in the referendum on 23 June.
A note from the Editor: As you may have guessed, this is our attempt at an April Fools' Day joke, but perhaps not outside the realms of possibility??!! The following guide may still be useful.
