EBF POSITION PAPER

EBF Position on EC Consultation on options to enhance the suitability and appropriateness assessments

BRUSSELS, 29 March 2022 –Last week, the European Banking Federation (EBF) expressed concerns regarding the European Commission’s proposals for a single assessment regime for retail investors and the provisions of a personal asset allocation strategy, transferable to any financial intermediary. The proposals could hinder innovation and competitiveness and have the potential to ultimately lead to dangerous concentration of risks.

• This approach would introduce unnecessary rigidity for investment firms, negatively impacting clients: a unique standardized questionnaire would not be able to address the differences among types of retail clients and would likely lead to a flattening of the quality of investment advice.
• Rules on personalized asset allocation strategy should not foresee standardized investor profiles: investment service providers already have in place classification systems based on the current legislation, available products, research and investment strategies. Any change to the system would cause administrative burdens and extra costs hindering EU investment institutions’s competitiveness

The weaknesses of the current regime are not clearly explained and therefore the rationale to modify it and the benefits it would bring are not obvious The EBF supports a high level of investor protection which requires avoiding information overload while ensuring that pre-contractual information is well understood by retail clients. To this end, the EBF supports a simplification of the investor protection rules in combination with measures to increase clients’ level of financial literacy.

For more information:
Paulin Guérin, Senior Policy Adviser Financing Sustainable Growth, p.guerin@ebf.eu
Marta Morellato, Financing Sustainable Growth team, m.morellato@ebf.eu

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About the EBF:

The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.