The European Commission said on Friday it is seeking views on the impact of fragmented regulations regarding retail investment products for the protection of investors.
Based on public response, which had to be sent before Jan. 18, 2008, the commission would assess whether existing rules of the European Union (EU) are sufficient to protect retail investors and, if not, whether corrective action is needed.
European retail investors are now able to choose between a variety of different product types to meet their investment needs thanks to continuing innovation in the structuring of retail investment products.
However, EU legislation applying to the institutions that launch these products imposes different rules on the disclosure of product information, and on the way in which financial intermediaries must conduct business with retail clients, and manage any conflicts of interest that might arise.
Regulatory divergence might represent a threat to the protection of retail investors, the commission said, citing concerns from regulators, financial institutions and consumers.
"I believe that there is a strong case for investigating whether these differences are harming investors and distorting markets," said EU Internal Market and Services Commissioner Charlie McCreevy. "However, we will not rush into an ill-considered response. It is essential that we tackle this issue with an open mind and in a responsible manner," he said.
The commission is expected to present its conclusions on the need for action in autumn of next year.
Source: Xinhua
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