EBF Position on EC Consultation on options to enhance the suitability and appropriateness assessments
30 March 2022
The proposals could hinder innovation and competitiveness and have the potential to ultimately lead to dangerous concentration of risks.
Last week, the European Banking Federation (EBF) expressed concerns
regarding the European Commission’s proposals for a single assessment
regime for retail investors and the provisions of a personal asset
allocation strategy, transferable to any financial intermediary.
- This approach would introduce unnecessary rigidity for investment firms, negatively impacting clients:
a unique standardized questionnaire would not be able to address the
differences among types of retail clients and would likely lead to a
flattening of the quality of investment advice.
- Rules on personalized asset allocation strategy should not foresee standardized investor profiles:
investment service providers already have in place classification
systems based on the current legislation, available products, research
and investment strategies. Any change to the system would cause
administrative burdens and extra costs hindering EU investment
institutions’s competitiveness
The weaknesses of the current regime are not clearly explained
and therefore the rationale to modify it and the benefits it would
bring are not obvious The EBF supports a high level of investor
protection which requires avoiding information overload while ensuring
that pre-contractual information is well understood by retail clients.
To this end, the EBF supports a simplification of the investor
protection rules in combination with measures to increase clients’ level
of financial literacy.
EBF
© EBF
