Brussels, 28/04/2009 (Agence Europe) - On Wednesday 29 April, the European Commission will announce that it is seeking harmonisation of pre-contractual information on packaged retail investment products, as well as rules on these products at a European level. On Monday 27 April in Lisbon, during a DECO organised seminar, the Commissioner for consumer protection, Meglena Kuneva declared that, “the requirements will be applied horizontally to all forms of package retail investment products, eliminating loopholes and gaps”. The Commission is also convinced that this harmonisation will create fair operating rules that will facilitate the cross-border distribution of the products in question. It will now prepare detailed proposals which will be put out to consultation, a necessary step before all legislative initiatives, by the end of 2009.
The planned harmonisation will require a European definition of packaged retail investment products. These products have the following characteristics: - they are designed to deliver capital accumulation over a medium- to long-term investment period; - they entail a degree of investment risk, although some provide capital guarantees; - they are exposed to multiple underlying assets; - they are marketed to natural persons. The financial crisis has highlighted the fact that consumers are not always aware of the risks they may be taking in investing in packaged retail investment products. The Commission will work, then, to harmonise pre-contractual information to give investors sufficient relevant information to enable them to make an enlightened choice. As its guide, it will use the sheet on key information that was included in the directive on the sales of UCITS (see EUROPE 9817). However, financial losses due to investment errors may also be the result of improper practices on the part of distributors. “I am particularly concerned about citizens having been misled to purchase invest products that were misrepresented to them that were not suitable for their investment needs,” Kuneva said. To draft its proposal on packaged retail investment products, the Commission will draw inspiration from the provisions in the MiFID directive (2004/39/EC on the sales process of financial products, the exercise of this activity and limiting conflicts of interest. (M.B./transl.rh/rt)