Latest decision is a major missed opportunity to boost retail participation in Europe
Last Friday, Member States endorsed the final compromise text of the Retail Investment Strategy (RIS) in the Council of the EU, marking a key step in the political process. The file now moves to the European Parliament for endorsement. Despite sustained and constructive engagement from the industry, the vital objective of encouraging more Europeans to invest and achieve better long-term financial outcomes has not been addressed. The final text fails to deal with existing barriers to retail participation and to simplify the existing customer journey. Instead, it introduces even more complex and ambiguous regulatory requirements that risk driving up operational costs for the financial industry, with little to no added value to the end investor.
EFAMA also remains particularly concerned that crucial elements of the framework will only be defined in extensive forthcoming technical standards (Level 2 measures). These highly technical discussions will be decisive in determining whether the legislation can be implemented in a workable manner. EFAMA therefore calls on the European Commission and the European Supervisory Authorities (ESAs) to ensure that this forthcoming process prioritises simplicity, proportionality, and practical implementation. This phase will need to avoid making things worse by adding overly complex and prescriptive requirements.
Tanguy van de Werve, Director General, commented: "The Retail Investment Strategy started with the right ambition but has drifted into an outcome that does not address the core issue: how to bring more European retail investors into capital markets. Unfortunately, it risks making the fund manufacturing and distribution processes even more complex, with no evidence that this will deliver meaningful improvements for retail investors. When we transition to Level 2, it will be critical to avoid adding unduly complex and prescriptive requirements to an already overly complex process."
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Notes to Editors
To learn more about our work on retail investment, please visit our website here.
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Hayley McEwen
Head of communications and membership development
