The consultation is expected to be launched this month, the commission said. It is to focus on pre-contractual information provided to investors and on how advisers market the products to consumers, with a broad aim of ensuring that investors fully understand what they are buying at the moment of purchase.
The industry consultation comes more than three years after the commission was first asked to look into concerns surrounding the Prips market by the Economic and Financial Affairs Council (Ecofin), and is part of a European Commission effort to set standards for investor protection, as well as to create a more fair environment for distributors of such products.
Financial services industry officials, who have yet to see the consultation documents, say they welcome anything that boosts standards and the industry’s reputation, and which levels the playing field for distributors. But as with all regulations, they say, there is always a potential concern that investor choice could be reduced and that the quality and cost of investment products could be unnecessarily affected.
Federation of European Independent Financial Advisers chief executive Paul Stanfield said that given the vast number of packaged retail products on the market, it was understandable that regulators would “want to find a way to create a regulatory structure to set standards”.
"The question is whether it will provide consumer protection without stifling good product development,” he said.
