The European Fund and Asset Management Association (EFAMA) has welcomed the adoption by the European Parliament of two pieces of legislation aimed at protecting retail investors.
The amendments brought to the UCITS directive will raise to a greater level the high-standards of protection enjoyed by UCITS investors and reconfirm its status as the ‘state-of-the-art’ regulation for investment funds worldwide.
They should also bolster the international recognition of UCITS as the vehicle of choice for the international distribution of investment funds, EFAMA says.
In particular, the strengthening and harmonisation of the UCITS depositary regime means clients’ assets will be better protected.
Since it was first discussed in 2006, EFAMA has been in favour of the PRIIPs initiative, which brings investors’ interests to the forefront. The Key Information Document (KID) required by the PRIIPs regulation will enhance transparency and increase investor protection. By enabling investors to compare different packaged investment opportunities or products, consumers will be better equipped to make an informed investment decisions. EFAMA welcomes the agreement reached by the co-legislators on this issue, which will play an active role in mitigating the risk of the mis-selling of investment products.
As the PRIIPs regulation will apply on a cross industry basis (asset management, bank and insurance), EFAMA welcomes the willingness of policy makers to reach a level playing field in the disclosure of such products offered to consumers. However, it is only a first step, as EFAMA believes further work will be needed to capture other similar products which are not already included in the scope of the PRIIPs regulation.
Peter De Proft (pictured), director general of EFAMA, says: “EFAMA welcomes the adoption of the PRIIPs regulation. From the beginning, we have been strong supporters of this initiative. It is an important step towards a better protection of retail investors. The Key Investor Document – a synthetic, plain language document already well-known to UCITS investors – will enable them to make better informed investment decisions and will facilitate comparisons between different types of retail investment products, therefore contributing to a level playing field across competing retail products.”
