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The European Commission Adopts a Retail Investment Package with the Aim of Empowering Retail Investors and Ensuring Their Fair Treatment and Protection

The European Commission has adopted a Retail Investment Package with the aim of empowering retail investors and ensuring their fair treatment and protection. The package is designed to enhance trust and confidence among retail investors and promote participation in the EU's Capital Markets Union.

The package includes several measures, including:

  1. Improved disclosure rules: Information provided to retail investors about investment products and services will be made more meaningful and standardized, taking into account digitalization and sustainability preferences.
  2. Transparency and cost comparability: The use of standard presentation and terminology on costs will be required to ensure that investment products offer value for money to retail investors.
  3. Investment performance reporting: Retail investors will receive clear information on the performance of their investment portfolio at least annually.
  4. Addressing conflicts of interest: Inducements for "execution-only" sales will be banned, and financial advice will be aligned with the best interests of retail investors. Stricter safeguards and transparency will be introduced where inducements are allowed.
  5. Protecting against misleading marketing: Financial intermediaries will be held fully responsible for the use and misuse of their marketing communication, including on social media or through paid influencers.
  6. Professional qualifications for financial advisors: High standards of professional qualifications will be preserved to ensure the competence of financial advisors.
  7. Financial literacy and consumer empowerment: Member States will be encouraged to implement measures supporting citizens' financial literacy, irrespective of their age, social background, or educational level.
  8. Streamlining eligibility criteria for professional investors: The eligibility criteria to become a professional investor will be made more proportionate, reducing administrative burdens and improving accessibility for sophisticated retail investors.
  9. Enhanced supervisory cooperation: Improved cooperation among national competent authorities and European Supervisory Authorities will ensure effective application of rules and combat fraud and malpractices.

The Retail Investment Package involves amending existing directives and regulations, including MiFID II, IDD, UCITS Directive, AIFMD, and Solvency II.

The package aims to cover the entire investment journey of retail investors, providing comprehensive measures to protect and empower them.

You can access the full text of the news here.

Kind regards,

Zumbul Attorneys-at-Law

info@zumbul.av.tr