The organization's Chair reported on the work that ESMA has undertaken in investigating how ETFs are distributed and sold across the EU, following-up on an earlier request from the SMSG. ESMA will be able to report back to the SMSG for its first meeting in 2014.
The SMSG discussed Investor Protection and EU regulatory status, ("PRIPS" and other initiatives), Vice-Chair Peter De Proft accounted for the recent developments in the EU Parliament regarding the Key Information Document regarding investment products (also known as PRIPS). Following the vote in Parliament it is unclear what the scope will be and which different types of products to be included. While corporate bonds remain in scope as does “complex” label remains in the text (which might be better suited for MiFID) it is not certain that insurance products will be fully covered. There is also some confusion between product distribution issues (which relate more to MiFID and IMD rules) and product manufacturing ones. The idea of complexity would need to be applied consistently.
The role for ESMA with regard to product intervention is also unclear in the current proposal. Compromises in the European Parliament on this dossier seem difficult. It was noted that tax reasons likely were behind many of the developments. The SMSG Chair expressed that the most important issue would not be whether to include corporate bonds, but to reach a solution so that life insurance products are clearly included.
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