Brussels, 21/04/2008 (Agence Europe) - In early April, the European Commission presented a summary of responses to its consultation on the need for European regulations to harmonise the rules on transparency and distribution of investment products (e.g. investment funds, life assurance products, structured securities) available to the general public. Opinions differed: all organisations representing consumers, and number of national regulators and the investment fund industry "UCITS" were in favour of legislative action at European level, whereas the rest of the industry opposes it. "The question is particularly important as consumers are increasingly keen to take their financial futures into their own hands, particularly regarding pensions", said Commissioner McCreevy in a press release. The result of this consultation, and of a public hearing which will be held in Brussels on Tuesday 15 July, will allow the Commission to refine its political vision, to be presented this autumn in a communication.
The consumers and a number of national regulators complained at the major differences between national rules on transparency and the distribution of the investment products in question. The investment fund industry "UCITS" stated for its part that the difference between the rules imposed upon it and those observed by competing products such as life assurance and structured products creates competition distortions. It therefore calls upon the Commission to launch a legislative initiative (see EUROPE 9619). The banking, securities and insurance industries, on the other hand, warned against fully harmonising the rules protecting consumers: EU intervention may increase costs, fail to take sufficient account of the specific nature of the products and would have a negative impact on financial innovation. Many contributions made by the industry were to the effect that instead, the emphasis should be laid on a harmonious application of the existing rules, rather than in harmonised legislation. They also pleaded in favour of self-regulatory mechanisms by in the market, an idea which left the consumers and a number of regulators somewhat cold. Many interested parties went on to plead in favour of a prudent attitude, calling on the European institutions to take the necessary step backwards to assess the implementation of the directives regarding the financial instruments markets (2004/39/EC) and insurance intermediation (2002/92/EC). These legislative acts contain, amongst other things, provisions on information and the distribution of the financial products in question.
According to those taking part in the meeting, the factors determining the promotion and sales of investment products are as follows: taxation applied to these products, distribution models, cultural preferences and financial innovation. (M.B.)