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BackIn the past, many a small investor has gone through some disappointing experiences concerning the investment of his savings. Time and time again it has transpired that a financial product, which was described as being attractive, turned out to be a rather bad investment that did not come close to anything, the investor had hoped for. With the help of a new basic information sheet for small investors, the EU legislator now wants to provide comparable, clear and uniform information on financial products. This week, MEPs voted on the respective proposed Regulation by the EU Commission in the plenum of the European Parliament.
In future, it shall be mandatory to provide so-called basic information sheets for financial investments, which allow the small investor to compare an investment with other products. Risks, which are associated with the product, have to be set out clearly and descriptions in the information sheet must not be ambiguous. Financial companies or consultants shall be held liable if they provide an investor with wrong information. Insurance products shall be exempt from the scope of the new Regulation.
However, it will take a while for the new law to come into force: there are still some issues where Council and European Parliament have not yet reached agreement; hence both institutions, together with the European Commission, have to find a compromise text in so-called trilogue discussions, which EU Parliament and Council must once again vote on. It remains to be seen, whether it will be possible to reach agreement by the end of the legislative period of the EU Parliament next year.
However, it will take a while for the new law to come into force: there are still some issues where Council and European Parliament have not yet reached agreement; hence both institutions, together with the European Commission, have to find a compromise text in so-called trilogue discussions, which EU Parliament and Council must once again vote on. It remains to be seen, whether it will be possible to reach agreement by the end of the legislative period of the EU Parliament next year.