On June 12, 2024, EU member states confirmed their position on the Retail Investment Strategy, following months of intensive negotiations under the Belgian Council Presidency. EFAMA welcomed the decision to move away from banning commissions on execution-only transactions, which ensures that retail investors will still have access to direct distribution channels such as fund platforms.

There is, however, much that still needs to be discussed and clarified, EFAMA explains. There are currently a variety of tests envisioned, including inducement, quality enhancement, best interest, and suitability and appropriateness tests. It is important that these tests work together effectively and do not create additional investment barriers. 

When it comes to value-for-money proposals, there are also lingering concerns about how the European supervisory benchmarks would interact with peer group assessments conducted by companies. The value-for-money framework must ensure that the data used for the supervisory benchmarks comes from the data used to conduct peer group assessments.  As things stand, the risk is high that we end up with a complex, costly, and ineffective value-for-money framework. 

Once the new European Parliament is fully constituted, the Retail Investment Strategy will be discussed further by both bodies to reach a final agreement.