News

Finance Watch publishes its position paper on Packaged Retail Investment Products (PRIPS)



Brussels, 31 October 2012 - Finance Watch, the Brussels-based public interest advocacy group, has today published a position paper “Towards suitable investment decisions?” on the EU’s proposal for a regulation on Key Information Documents for Investment Products.



The EU’s proposal will require that retail investors are shown a synthetic information document before purchasing so-called packaged investment products. Packaged investment products – a EUR 9 trillion market - include investment funds, insurance products linked to financial markets and structured retail investment products.



The purpose of the proposal is to make information on investment products more intelligible and comparable for retail investors.



Finance Watch’s position paper calls on the EU to be more ambitious in its proposal. In addition to measures for a Key Information Document, it should also adapt the UCITS investment rules to prevent retail investors from being offered products that are not suitable for them. It should also give more information about the costs and impacts of structured products.



The paper’s author, Frédéric Hache, said: “Clear, comparable information is essential to protect retail investors and we therefore welcome the Commission’s proposal. There is, however, some evidence that intervening only at the point of sale may not be enough to protect investors. With complex investment products, this is especially worrying.”



Thierry Philipponnat, Secretary General of Finance Watch, said: ““Investment products have social as well as financial consequences. If society wants capital to fund productive activity, the first step is to let investors know whether they are making an investment in the economy or a financial bet.”



The report can be downloaded here:

http://www.finance-watch.org/wp-content/uploads/2012/10/Towards-suitable-investment-decisions-PRIPs.pdf



The summary and recommendations on their own can be downloaded here:

http://www.finance-watch.org/wp-content/uploads/2012/10/Summary-and-recommendations-PRIPs-EN.pdf



ENDS



For further information, please contact:



Frédéric Hache, senior research analyst, Finance Watch, at frederic.hache@finance-watch.org or + 32 2 401 8720



Greg Ford, head of communications, Finance Watch, at greg.ford@finance-watch.org or +44 7703 219 222



NOTES FOR EDITORS



The European Commission adopted a proposal on 3 July 2012 for a regulation for a new Key Information Document (KID) to be produced by investment product manufacturers and provided to retail customers when they are considering buying investment products.



The expected timeline for the proposal is follows:



30 October – Council Working Group (national experts)

6 November – ECON exchange of views

Mid-November – ECON draft report

26 November – ECON presentation of draft report

December – ECON amendment deadline

20 March – ECON vote

8 May – Plenary vote



For further details of the proposal, including the text and the impact assessment, see the Commission webpage: http://ec.europa.eu/internal_market/finservices-retail/investment_products_en.htm