Member Article

New EU regulations to protect private investors introduced

The European Commission is considering the introduction of new rules to protect private investors.

All Governments in the EU will now be required to implement new rules to govern the sale of packaged investment policies.

This would mean that all customers would be given Key Information Documents (KID), which would “prevent consumers from being sold investment and insurance products, including pension plans, that are not right for them”.

Key Information Documents will also be included in a standard form, allowing customers to easily compare investments they were considering, and will apply to “private pensions, all types of investment funds, insurance-based investments and retail structured products”, including those marketed by banks as well as investment funds and insurers.

The EU retail investment market is worth up to 10 trillion Euros, meaning that life savings can be at stake if something goes wrong.

The Commission said: “Each KID will provide information on the product’s main features, as well as straightforward information on the risks and costs.

“The KID will make clear to every consumer whether or not they could lose money,” it emphasised.”

The European Commission has been consulting on its new rules since 2008.

It hopes to have the new KID rules in place by the end of 2014

This was posted in Bdaily's Members' News section by Ruth Mitchell .