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Two fields of business in which cross-border supply may increase competition to the benefit of retail investors are pensions and long-term investments. Indeed, cross-border supply and competition is already largely achieved in the UCITS field (although improvements are possible and desirable), but such cross-border supply and competition are largely inexistent in the pensions and long-term assets businesses. The introduction of the ELTIF is a first step into this direction and PEPP could be a second one, provided these frameworks are allowed to function as intended and no national gold-plating or the introduction of excessive complexity are allowed to creep in.
In ALFI opinion, the current body of EU financial service legislation does not sufficiently take into consideration the improvements that technology has brought to consumers in terms of empowering them with the ability to get information at the time and in the format that they find most useful. Much of the standardised disclosure requirements (e.g. KIID) were developed around the time where the majority of communication was in paper form. This now has to evolve to adapt to the new ‘digital age’ where communications are increasingly tailored to the individual in terms of format, media and content.
In the UCITS field a lot has been done to achieve the objective of providing a safe, simple and understandable product. The KIID has contributed to providing retail investors with a more understandable summary of the product they are buying than was the case with the simplified prospectus, which now allows products to be compared much better. The PRIIPs regulation goes in the same direction. But to be efficient the framework must be well adapted to the purpose it intends to achieve and overregulation should be avoided.