The finalisation phase of work on the ‘retail investment’ legislative package is proving to be difficult as co-legislators strive to put the finishing touches on the legal texts. Although a political agreement was reached last December between the Council of the European Union and the European Parliament (see EUROPE 13776/15), five Member States have recently expressed their dissatisfaction with the final wording of the texts.
Accordingly, new proposals for amendments, recently put forward within the EU Council, are essentially aimed at clarifying the consistency of the texts and, ultimately, at avoiding any administrative burden, particularly with regard to financial retrocessions, one of the most politically sensitive aspects of the legislative package.
In December, the co-legislators agreed to enshrine in ‘level 1’ legislation - the directives in the package - the requirement for firms to demonstrate that paid advice provides tangible benefit to the customer and complies with the best interests principle. However, EU Member States were to retain the option of introducing a national ban.
“There will be no blocking minority”, a source close to the matter told Agence Europe on Tuesday 12 May, confident about the outcome of the final adjustments. According to this source, the prolongation of the current discussions is due more to a lack of consultation within the Council of the EU than to a genuine questioning of the political agreement, contrary to what some participants at the Economic and Financial Affairs Council of Tuesday 5 May would have implied.
“We have a problem with the gap between the political agreement reached in December and the current compromise proposed to us. At this stage, we cannot accept the text as it stands”, said Bertrand Dumont, Director General of the French Treasury.
“I think it’s important that we also try to solve the problems with respect to the bureaucratic burden”, said Jeanette Schwamberger, State Secretary at the German Federal Ministry of Finance.
“The current text may create obligations that could lead to disproportionate burdens and legal uncertainty”, added Jurand Drop, Undersecretary of State at the Polish Ministry of Finance.
Slovakia’s Finance Minister, Alena Schillerová, called for negotiations to be reopened “so that consistency between a political agreement and its technical implementation in the legislative text is ensured”. (Original version in French by Bernard Denuit)