After months of negotiations under the Belgian Council Presidency, EU member states confirmed their position on the retail investment strategy today, a move welcomed by the European Fund and Asset Management Association (Efama).
In a statement released today, Efama supported the decision to move away from banning commissions on execution-only transactions, ensuring that retail investors maintain access to direct distribution channels such as fund platforms.
Efama suggests solutions for retail investment strategy
Despite this progress, Efama highlighted that significant work remains. There are various tests proposed, including inducement, quality enhancement, best interest and suitability and appropriateness tests, it stated. “It is important that these tests work together effectively and do not create additional investment barriers,” stated Efama.
Regarding value-for-money proposals, Efama expressed concerns about the interaction between European supervisory benchmarks and peer group assessments conducted by companies. The organisation stressed that the data used for supervisory benchmarks should align with the data for peer group assessments to prevent a complex and ineffective framework.
Trade bodies concerned over “far reaching” EU Retail Investment Strategy
Further discussions on the Retail Investment Strategy will take place once the new European Parliament is fully constituted, with both legislative bodies aiming to reach a final agreement.
Kimon Argyropoulos, regulatory policy advisor at Efama, commented: “The forthcoming trialogue discussions present EU policymakers with an opportunity to refine the Retail Investment Strategy and avoid unnecessary complexity. For example, having two separate systems each trying to define value-for-money would be a recipe for failure. Policymakers need to create a framework that is both effective and practical, minimizing burdens for the industry while maximising benefits for retail investors.”
