The new rules provide a wider range of efficient investment and financing opportunities for citizens and businesses. These will also contribute to the EU’s savings and investments union (SIU) and to the simplification of financial services regulation.
The EU Council and Parliament recently agreed on an updated retail investment framework to empower and protect consumers when they invest.
The framework will also help foster trust and raise competitiveness in financial markets.
It provides a wider range of efficient investment and financing opportunities for citizens and businesses, and contributes to the EU’s savings and investments union.
At the same time, the updated legislation will offer consumers the same level of clear information, fair treatment and high protection regardless of which investment products, marketing and distribution channels they use, an official release said.
The package modernises and simplifies investor protection rules so that they are coherent across different financial sectors.
Retail investment firms will be obliged to identify and quantify all costs and charges borne by investors related to the investment products they advise.
The rules also improve the standardised information about investment products that firms must publish to ensure that consumers can make informed investment decisions.
Information on investments regarding costs, risk and expected returns will be made more visible and accessible for consumers.
In addition to the enhanced rules on inducements, the text builds on other mechanisms to maintain a high level of investor protection while avoiding unnecessary burdens for investment firms, insurance companies and insurance intermediaries.
The agreed package introduces safeguards to combat conflicts of interest for financial advisers by introducing strengthened rules on inducements—fees, commissions, monetary or non-monetary benefits received by an investment firm in relation to investment services it provides to a client.
Member states wishing to introduce an inducement ban will still be allowed to do so.
More experienced investors may not necessarily need the same level of protection as the average retail investor. The updated framework will allow more retail investors to be treated as professional clients.
Technical work will now continue to finalise the legal texts early in 2026. Member states will have to transpose the new rules 24 months following their publication in the EU’s official journal.
Fibre2Fashion News Desk (DS)