European Commission proposes controversial new measures to encourage retail investment in the EU

The adoption of the Retail Investment Package by the European Commission has sparked concerns among industry experts. Whilst the package aims to prioritise consumer interests and strengthen investor protection, critics argue that the prohibition of inducements may have unintended consequences. The ABBL believes it is essential to carefully evaluate the potential impacts of this measure to ensure a balanced approach to retail investing.

The Retail Investment Package encompasses a wide range of measures designed to empower retail investors, enhance transparency, and address conflicts of interest. The ABBL is actively advocating towards theseobjectives, notably through our proposal for more pragmatic criteria to make retail clients eligible to the”professional investor” category. However, the proposal to introduce a ban on inducements, first for “execution-only” products and products distributed without advice and possibly for all products in a future review, has raised eyebrows within the investment community. Critics argue that such a prohibition could hinder market efficiency and limit access to investment opportunities for retail investors.

It is crucial to strike a balance between protecting consumers and maintaining a thriving investment landscape. As the negotiations on the Retail Investment Package progress in the EU, the ABBL actively engages in the ongoing dialogue between industry stakeholders and regulators to ensure that the interests of both consumers and investors are adequately considered.

Link to the proposal

Contacts: Gilles Pierre, Head of Banking and Financial Regulation and Xavier Bové, European Affairs Adviser.