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Retail investment strategy


Europe has one of the highest individual savings rates in the world. However, the level of retail investor participation in capital markets remains low compared to other economies, with a majority of citizens keeping their savings in bank deposits and traditional saving products, generating low or even negative real interest rates. Developing retail investment and making the EU an even safer place for individuals to save and invest long-term is one of the main objectives of the new CMU action plan published in September 2020, in order to support the long-term funding of EU enterprises and also ensure that citizens benefit sufficiently from the investment opportunities offered by capital markets, notably for preparing their retirement.

In addition to measures for improving the MiFID II, IDD and PRIIPs frameworks in particular in the areas of inducements, disclosure and advice, the Commission has announced in the CMU action plan its intention to propose a retail investment strategy for the first half of 2022.

In this perspective, a consultation has been launched covering the main topics pertaining to investor protection and guidance such as financial literacy, disclosure requirements, digital innovation, suitability and appropriateness assessment, investor categorisation, inducements and quality of advice, product complexity…

At present these rules are set out in several separate distribution and product EU regulatory frameworks (MiFID, IDD, UCITS, PRIIPs…), resulting in differing rules and disclosure requirements across products and a lack of common perspective on the key drivers needed for developing retail investment. There is the intention with the retail investment strategy of achieving a more coherent framework for retail investment and also improving existing rules – e.g. taking into account evolutions such as digitalisation and enhancing existing advice and inducement rules in particular, the effectiveness of which has been questioned. How to develop retail investment in fund products is also being addressed in the context of the ELTIF and AIFMD reviews.

Contributions to the policy debate

Extracted from the main Eurofi publications (Regulatory Updates, Views Magazines and Conference Summaries)