Editor's letter

The fact that anything useful ever comes out of the European Union is impressive, given its lumbering bureaucracy designed to accommodate so many differing views from so many different countries. Europe is split, whichever way you look at it. In northern Europe, the assumption is that laws are broadly intended, to the extent that once something is made illegal then associated practices are also banned

The prevailing common sense in the north would have it that you should look into the intent behind the law and then apply the logic across the board.

In southern Europe they do things differently, and regulations are treated more literally. Unless a specific practice is excluded, banned or forbidden, then new laws will not affect practices left unnamed. As a result, and in order to recognise these and other historic differences, the EU has generally bent over backwards to respect this by leaving the final implementation of its legislation to national governments.

This is where the EU is at in its deliberations over structured products, all of which came to light on July 15 in Brussels, where the gamut of bodies representing the various facets of Europe's retail investment product industry came together to discuss common practices.

With such a naturally diverse selection of views, it was no surprise when the Open Hearing on Retail Investment Products (RIP) ended with a host of politically inspired declarations of respect for national laws and practices. All very reasonable, you might think, until it was pointed out by one speaker that we have been here before with retail investment products. The end result of those lengthy consultations was the flagship legislation contained in the Markets in Financial Instruments Directive (Mifid).

It would be a pity - not to mention ridiculously time-consuming and expensive - to return to old battles that were fought when that impressive piece of legislation was carved out and formalised. But judging by the outrageous misunderstanding and pure ignorance of Mifid shown by some very prominent speakers at the open hearing, the RIP acronym applied to the investment industry might prove more useful than expected for future headlines.

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