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BackIf the Commission had its way, a so-called basic factsheet will in future provide small investors interested in financial products with more comprehensive and better information on investment products. This is aimed at increasing consumer protection for small investors. This week now, the Commission proposal was discussed in the European Parliament. However, MEPs participating in the debate made one thing clear: the Commission text does not go far enough – consumer protection must be improved.
MEP Béres of the European Social Democrats in charge on behalf of the European Parliament supports the idea that a basic factsheet has to be available for all savings and investment products - including for example, also life insurances. This is in accordance with the position of the Chamber of Labour. The Commission intended to restrict the scope to certain “packaged” investment products and investments with uncertain yields. Apart from that, small investors shall also be provided with comprehensive information on costs, which are associated with an investment and receive improved information on possible risks. This too is in accordance with the demands of the Chamber of Labour. In addition, the rapporteur would like to see criminal sanctions in case of violations of the Regulation. This would be necessary to achieve a deterrent effect on illegal practices.
The other MEPs also generally supported more transparency for financial products. All too often, the risk potential of investments was not explained, said EU representative MEP Pietikäinen of the European People's Party. The Liberals demand clear and simple information to give investors a better idea of a product. They regard the Commission proposal as little ambitious and disappointing. The Green MEP Lamberts praises the position of the Social Democrats and demands that investors must know exactly what is happening to their money.
However, whether MEPs were really serious about improving consumer protection for small investor products will only show when the amendment proposals have been submitted in February. The competent Economic Committee will probably vote on the Parliament position on 26th March; the vote in the plenum follows in May.
Additional information:
AK Position on the Regulation proposal on key information documents for investment products
The other MEPs also generally supported more transparency for financial products. All too often, the risk potential of investments was not explained, said EU representative MEP Pietikäinen of the European People's Party. The Liberals demand clear and simple information to give investors a better idea of a product. They regard the Commission proposal as little ambitious and disappointing. The Green MEP Lamberts praises the position of the Social Democrats and demands that investors must know exactly what is happening to their money.
However, whether MEPs were really serious about improving consumer protection for small investor products will only show when the amendment proposals have been submitted in February. The competent Economic Committee will probably vote on the Parliament position on 26th March; the vote in the plenum follows in May.
Additional information:
AK Position on the Regulation proposal on key information documents for investment products