The European Union now accounts for a large proportion of financial regulation in place in the UK, and the financial crisis lead to a greater focus on conduct and consumer protection issues. To ensure that the needs of UK consumers are adequately represented in the European policy-making process, the Consumer Panel maintain close links with decision-makers at EU-level.
In 2016, our main focus continues to be on the Capital Markets Union initiative. We submitted our response[1] to the European Commission's Green Paper in May 2015. We are also closely following the European Commission's work to make retail financial services more freely available across national borders, and will liaise closely with HM Treasury and the FCA as they implement the Insurance Distribution Directive[2].
Consumer representation
Our current priority is to increase the representation of consumers within the EU’s decision-making processes, in particular on the stakeholder groups of the European Commission and the European Supervisory Authorities EBA, EIOPA and ESMA.
Our research[3] has found that industry lobbyists vastly outnumber consumer representatives in Brussels, and we will be discussing this as a matter of urgency with the European Commission as part of the ESA review.
Financial services consumer groups often lack the resources for effective representation, whether in the form of financial backing, limited access to technical data and a lack of knowledge of EU processes and procedures.
The Panel believes that several solutions should be implemented to redress this imbalance and to improve the representation of consumers at EU-level:
- A statutory requirement for the ESAs to provide feedback to their stakeholder groups;
- A review of remuneration and expenses to encourage the right balance of expertise on the ESA stakeholder groups;
- Increased support and resources for the stakeholder groups to carry out their own research and build up data.
Legislative agenda
On the legislative side, we are focusing on the transposition and implementation of the new Insurance Distribution Directive[4], which will have important implications for the UK insurance landscape, in particular as regards disclosure and the new Product Information Document. We are also in contact with the regulator about the revision of the Prospectus Directive, which should continue to safeguard the interests of prospective retail investors.
Another matter of concern is the implementation of the new MiFID 2 and PRIIPS frameworks, which affect UK investors. These laws are closely linked to the RDR and the Panel’s work on disclosure of investment costs[5], and we responded[6] to the European Securities & Markets Authority consultation on product governance, disclosure and transparency of fees in detail. The PRIIPs Key Information Document for retail investment products in particular has the potential to bring much greater clarity about the risks and costs of investing.