Investors buying financial products would get better information and more protection under proposed new measures.
As the financial crisis has demonstrated, the EU needs to strengthen its rules governing sales of investment products – to ensure that investors receive clearer information and better advice.
Rules have not kept pace with the increasingly complex products now on sale to ordinary investors. The Commission’s proposals aim to make sellers of investment products put their customers' interests first.
Filling the information gap
One proposal for a standard information document would require investment advisors to provide investors with certain key information for each product. The document would help investors:
Buying insurance - more protection
Current rules for insurance products are not applied consistently by EU countries and aren't detailed enough to provide adequate protection. Some sales are not covered by the rules at all.
The Commission is proposing common standards on all insurance sales , whether made through a broker or direct. The rules would guarantee consumers proper advice and information about the seller’s commission and other fees.
…and mutual funds
Some 75% of all collective investments made by small investors go to UCITS – European mutual funds. For investor safety, UCITS assets are held by a separate company known as a depositary, which also checks whether fund managers follow the rules.
The proposed measures would establish clearer and more uniform rules on UCITS , covering:
Stronger rules would complement other EU measures to protect investors. These include providing access to investor compensation when things go wrong and more financial education and training.