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Brussels, 3 April 2008

Retail investment products: Commission publishes feedback statement on call for evidence

The European Commission has published a feedback statement summarising the 80 responses received to its call for evidence on "substitute" retail investment products. The call for evidence invited views on whether differences in EU rules on the transparency and distribution of retail investment products – including investment funds, unit-linked life insurance products and structured securities – give rise to material differences in the level of regulatory protection for retail investors. It also invited opinions on whether action was needed at EU level to respond to any identified weaknesses. The feedback statement summarises the wide range of views expressed. The Commission will continue to gather opinion and evidence on these issues. The next major milestone will take the form of an open hearing to be held in Brussels on 15 July 2008. The Commission will publish a Communication in autumn 2008 in which it takes an opinion on whether there is a need for further work in this area.

Internal Market and Services Commissioner Charlie McCreevy said: "Taken together, investors have allocated over € 10 trillion to the main families of retail investment product. It is incumbent on us to ensure that the regulatory framework supports the continued successful development of these markets. This is all the more so, at a time when consumers are required to take greater responsibility for their financial futures, notably for retirement provisioning. The call for evidence is an important first step in assessing the overall coherence of rules that have sprung up in a piecemeal way. The depth and quality of the 80 written submissions received are impressive. Stakeholders have provided a solid base of evidence and opinion. We will continue to gather evidence from a wide range of stakeholders before forming a view on the existence of risks or the need for action of any kind."

The call for evidence invited evidence and views on the existence of a real and significant risk to investor protection arising from variations in rules on product transparency and distribution that apply depending on the status of the retail investment product (including investment funds, structured securities, unit-linked life insurance, etc.). The feedback statement provides a high-level synthesis of the 80 written submissions received from 21 countries, including 17 European Union Member States.

Stakeholders differed widely in their assessment of whether different sectoral rules on product transparency and distribution gave rise to investor protection concerns. Responses from all consumers, many public authorities and some industry sectors revealed concern that these differences may give rise to risks to investors. However, many industry participants argued that the protections built in to existing EU rules - in combination with national rules and self-regulatory initiatives - provide a robust framework for investor protection and are well-tailored to different product types.

It was noted that important EU legislation – MiFID and Insurance Mediation Directive – have only recently entered into force and should be given their chance to prove their worth. The feedback statement also summarises the wide spectrum of views on whether corrective action is needed at EU level – or whether it is sufficient to rely on national or self-regulatory initiatives to complement EU legislative provisions.

Further intensive consultation and evidence gathering with all interested stakeholders will take place in the forthcoming months. As part of this consultation process, a public hearing will be held on 15 July 2008 in Brussels. Commissioner McCreevy will deliver the keynote speech. The programme and registration details will be published shortly.

Views expressed at the public hearing, together with the evidence gathered during the consultation process, will contribute to a Communication on retail investment products that the Commission will present to the Council and Parliament in autumn 2008. This Communication will consider whether there is evidence of a significant risk of investor detriment and whether there is a need for further work in this area.
The feedback statement, together with all contributions authorised for publication, is available at:

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