The new offering of a horizontal directive was the most that could have been hoped for and has been welcomed by all of the many lobbying groups from Europe's now slightly diminished EUR8 trillion retail investment products industry. The promise is that there will be one code of practice that will prevail for the disclosure of information and the processes employed for the sale of investment to retail investors. Great. But, yet again, there is a blot on the landscape and, yet again, this lies in the implementation.
After a group hug in Brussels last May at an Open Hearing on retail investment products, there was a feeling that progress could be made. This promise of a new directive is progress, in principle, and advances have also been made in practice, with the EU finally accepting that Mifid should be a building block for any new rule. All of which is good. But then the EU lets itself down. It is fine to start with Mifid, and sensible to use the new directive to maybe provide more insight into the intended meaning of the terms 'appropriateness' and 'complex' - for which an Open Hearing was to be held under the aegis of the EU's independent Committee of European Securities Regulators (CESR) on June 5, as Structured Products went to press.
But then along comes the suggestion from the EU that the Level 2 and Level 3 implementation of the new horizontal directive could well be based on the consultation paper on technical issues relating to Key Information Document disclosures for Undertakings for Collective Investment in Transferable Securities published by CESR. That's all well and good if the principles relating to Ucits funds replicated the requirements of the structured products business. Sadly, they do not, so while we all luxuriate in the glow of some progress at the regional regulator level, loins need to be girded for the next round of bash the bureaucrat.
Richard Jory, [email protected], +44 (0)20 7484 9802.