- The large number of financial product mis-selling cases in EU Member States is evidence that intervening at the point of sale is not always sufficient, and that it is preferable for all stakeholders to intervene earlier and prevent consumer detriment before it occurs rather than after.
- As a significant portion of mis-selling cases is related to product failure, this requires in our view action targeted at this specific issue such as product design rules, within product governance.
- The success of UCITS is evidence that a sound framework is valued by retail investors and that product investment rules do not have an adverse impact on choice and innovation.
- Existing Member States product rules share a common purpose, and their tried and tested principles have significant overlaps. This should facilitate agreeing on a set of common principles without delaying the PRIPs file.
- Based on existing product regulations, we propose a set of six principles. Such principles could be used either for banning detrimental features alternatively for a warning label on the KID. We believe that these principles would have prevented many of the recent mis-selling cases.