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Brussels, 29th April 2009

Financial services: Commission proposes better investor protection measures for packaged retail investment products

The European Commission has committed to delivering important improvements to investor protection measures for the main investment products bought by retail investors. Inconsistencies in existing standards can be detrimental to investors and can lead to competitive distortions in the retail investment market. The Commission's conclusions, set out in the Communication on Packaged Retail Investment Products, are that product information requirements and rules on product sales need to be improved and made more coherent. The Communication outlines proposals for a new, horizontal legislative approach, drawing on the best of existing requirements and applying these to all relevant products. The Commission will now begin work on the detailed legislative proposals required for this new approach, and will provide an orientation on the work by the end of 2009.

Internal Market and Services Commissioner Charlie McCreevy said: "The financial crisis has underlined once again how important it is that retail investors are able to make informed investment decisions. It is vital that investors receive information they can trust and understand about the investments they make, and that those selling investments always treat investors fairly and focus on their needs. The ambitious programme of work we have announced today is designed to take us a good way towards this goal, by ensuring that information about and sales of packaged retail investment products are regulated to high and consistent standards."

The proposals focus on product disclosures and sales processes for all packaged retail investment products, such as investment funds, insurance-based investments and the various types of structured products. These products dominate the retail investment market, satisfy similar investor needs and raise comparable and important investor protection challenges.

The Communication does not contain detailed legislative proposals at this stage but sets out the high-level principles of a horizontal approach to product disclosures and selling practices and commits the Commission to bring forward legislative proposals to deliver these results.


  • The market for packaged retail investment products is very large, and can be estimated to have been worth up to 8 trillion EUR at the end of 2008.
  • These products can offer considerable benefits to retail investors. However, they are often complex and difficult for investors to fully understand, particularly with regard to their risks and costs.
  • These proposals are part of the reform programme set out in the Commission Communication for the Spring European Council (IP/09/351) to rebuild confidence and to deliver responsible financial markets for the future.
  • The Commission has been working with the Committee of European Securities Regulators (CESR) on proposals for an investor-friendly product information document for UCITS[1] funds, the 'Key Investor Information' (KII), which forms a good benchmark for other packaged retail investment products.
  • Rules on product sales, whether by an intermediary or product provider, cover such areas as conflicts of interest, inducements and the suitability or appropriateness of the sale. The Commission considers that the relevant provisions of the Markets in Financial Instruments Directive (MiFID) provide a good benchmark for the sale of all packaged retail investment products.

More information is available at:


[1] Undertakings for Collective Investment in Transferable Securities

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