‘‘All consumers’ products must be brought under the same regime’’
With respect to distribution of savings products, do you regard the internal market as completed?
The Market in Financial Instruments Directive (MiFID) has largely established a common European standard for good practices. It has pushed on two key things: transparency and suitability. But two important things remain to be done. The first is tax harmonisation, with regard to tax reporting requirements, definitions of investment concepts like distribution or dividend, and, above all, the treatment of funds mergers which is currently a major impairment to economies of scale. The second area is structured products and insurance linked products. A lot of the excellent progress we have achieved through UCITS and MIFID towards consumer protection, selling practices and transparency do not apply to these products. Until all consumers’ products are brought under the same regime, we cannot claim victory on the internal market. That’s why the Package Retail Investment Products (PRIP’s) initiative of the Commission is so important.
Do you support the idea to achieve comparability of such different products through a single so called KID (Key Information Document) that would be compulsory across the whole range of retail products?
We think it’s a good idea to have a short document, so that’s understandable to consumers, something that they’ll actually read, which isn’t the case now. It’s actually not that complicated to define the basics : a basic description, information on risks, suitability judgement, costs and performance. The main problem with it is to restrict it to two pages. And the regulation also specifies the size of the prints! But whatever extra effort we have to make in ensuring consumers are well protected is a small price to pay to ensure that the consumers hold the industry in high esteem.