The EU Capital Markets Union (CMU) is a plan to create a Single Market for capital. The aim is to get money - investments and savings - flowing across the EU to benefit consumers, investors and companies, regardless of where they are located.

A first Green Paper on CMU was published in 2015, followed by various follow-up measures, a key one being the 2020 CMU Action Plan setting out 16 legislative and non-legislative measures, including actions of importance for intermediaries, such as increasing the quality of financial advice and an assessment and review of the rules related to inducements, investment advice and information disclosure.

Regarding the latter, the Commission has prepared a Retail Investment Strategy (RIS) which should focus on the interests of individual investors:

“An individual investor should benefit from: (i) adequate protection, (ii) bias-free advice and fair treatment, (iii) open markets with a variety of competitive and cost-efficient financial services and products, and (iv) transparent, comparable and understandable product information. EU legislation should be forward-looking and should reflect ongoing developments in digitalisation and sustainability, as well as the increasing need for retirement savings.”

The RIS looks in parallel at IDD (IBIPs chapter), MiFID II and PRIIPs.

(Last updated on 24 May 2024)

28 November 2024 - RIS: Together with other European associations representing the industry, BIPAR calls upon the EU co-legislators to assess the Retail Investment Strategy in light of the Commission's competitiveness objectives.

Ahead of the upcoming trilogue negotiations on the RIS proposals, BIPAR, together with other European associations in the financial services sector, calls upon the EU co-legislators to refocus the RIS on what matters: enabling citizens to invest in the capital market without imposing excessive burdens on the market.

The current RIS proposals would add further complexity and bureaucracy to the already heavily regulated frameworks that govern the distribution of investment and insurance-based investment products (IBIPs). This approach contradicts the new Commission’s commitments to reducing red tape for market participants, fostering a simpler regulatory environment and strengthening the attractiveness of EU financial markets.

BIPAR, together with other European associations in the financial services sector, asks the EU legislators to focus in particular on :

• Simplification for firms and retail investors: The introduction of numerous Level 2 and 3 measures would create further uncertainty and complexity. The RIS should aim to streamline regulations and avoid imposing new, disproportionate compliance requirements.
• Streamlined sales processes for retail investors: the advice process for purchasing products could extend to over two hours for certain products (e.g., IBIPs). The RIS should strive to reduce these barriers and ensure that investors can access European-regulated products (eg, UCITS funds or IBIPs) in a leaner way.
• Reduction of information overload: The RIS should improve and focus on meaningful and relevant disclosures. Emphasising key product benefits, such as financial guarantees and other qualitative features that drive consumer investment decisions, will encourage greater participation in the EU financial markets.

With its members, BIPAR will continue to promote that the final RIS texts allow retail investors to take full advantages of the capital markets.

The joint statement was co-signed by the European Banking Federation, EFAMA, Insurance Europe, AMICE Mutuals, BIPAR, the Conference of EU Bancassureurs CEB, European Association of Co-operative Banks, European Association of Public Banks (EAPB), European Forum of Securities Associations, WSBI-ESBG and the EUSIPA - European Structured Investment Products Association).

“The EU's Retail Investment Strategy - Everything should be made as simple as possible, but not simpler”

Article written by Prof. Karel Van Hulle for BIPAR

February 2024