Brussels, 18/12/2009 (Agence Europe) - On Wednesday 16 December 2009, the European Commission published a progress report on its draft legislation to harmonise the sale of financial services to consumers (see EUROPE 9918), examining three areas - the scope of the new rules, information to be provided before contacts are entered into and sales practices.
Whether consumer financial products are covered by the new regulation will be decided by whether their purpose is to accumulate capital. The European Commission argues that this approach is necessary and most stakeholders agree. The report does not examine whether pensions and insurance products should be covered, but it says that investment in commodities and real estate will not be included. The rules on information to be provided before contracts are entered into is based on a factsheet produced for the sale of harmonised 'UCITS' funds and include information to make it easier to shop around among products of a similar type and more detailed rules to distinguish between different consumer financial products. Further work is required to decide who will be responsible for preparing the pre-sale consumer information document (the body providing the product or the agent selling the product). There will be EU rules on sales practices based on the rules set out in Directive 2004/39/EC on financial products and conflicts of interest, and ensuring customers are not missold products. (M.B. trans fl)