Sven Giegold
Mitglied der Grünen/EFA-Fraktion im Europaparlament

Sprecher Europagruppe Grüne
„Kommt, wir bauen das neue Europa!“

Financial services: More powers for European Supervisory Authority to promote consumer protection and market trust in complex investment products (PRIIPs)

The implementation of the PRIIPs regulation (“regulation on key information documents for packaged retail and insurance-based investment products”) forges ahead. Recently, the European Commission has finalised a framework of rules, which allow the European Insurance and Occupational Pensions Authority (EIOPA) to intervene under clear conditions if marketing, distribution or sale of insurance investment products create a significant investor protection concerns or threaten the stability and functioning for EU financial markets.

The PRIIPs regulation will provide a stand alone document, which aims at providing important information on retail investors, such as in regards to risk, rewards and costs. The scope of this information document covers main retail investment products, such as life insurances and investment fund products.

The regulation provides a mandate to the European Commission to elaborate the detailed rules required to put the PRIIPs provisions in practice. This implementation process consists of four main working strands: (1) on the main content of the PRIIPs KID in regards to the disclosure of risk, performance and costs, (2) on the rules which create conditional product intervention powers for the  European Insurance and Occupational Pensions Authority (EIOPA), (3)  on the disclosure of information for products following a sustainable investment strategy, (4) on the establishment of a comprehension alert for specifically complex PRIIPs products. Consequently, the issue of the conditional product intervention powers is entirely distinct from the implementation rules for the content of the PRIIPs KID on risk, performance and costs, proposed by the Commission, which the European Parliament rejected in September.

 

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:

“Despite maybe sounding quite technical and dry, these finalised rules on conditional product intervention are an important contribution to enhance consumer protection and competition for retail investment products in the Single Market. The rules will give teeth to the PRIIPs regulation and its respective key information document (KID) for investors. The rules pave the way for EIOPA to become active and intervene if PRIIPs products, such as life insurances, turn out to threaten investor protection and stability as well as functioning of the Single Market. This is good news for consumers and product providers, since these extended powers for EIOPA to tackle harmful product can enhance trust in the European Single Market, which is beneficial for all market participants.”

Please, find the legal text (delegated regulation) on the rules establishing conditional product intervention powers under the PRIIPs regulation here: https://sven-giegold.de/priips-delegated-regulation-product-intervention-powers/

Please, find futher information on the European Parliament’s rejection of the proposed rules to implement the main content of the PRIIPs KID, such as in regards to the disclosure of risk, performance and costs: https://sven-giegold.de/2016/financial-services-first-corrective-detention-class-for-the-commission-european-parliament-rejects-rules-for-complex-financial-products-priips/