EU Retail Investment Strategy – What’s in the final rules?

The impactful EU Retail Investment Strategy package has been finalised and endorsed by the Council, three years after the Commission had first proposed it. The package aims to support greater retail investor participation in capital markets and introduces significant changes to investor protection requirements across several key pieces of sectoral legislation, with impacts extending beyond retail market business. 

Key changes include:

• the introduction of new “value for money” requirements for manufacturers and distributors of investment products which (although less formulaic than originally proposed) will require firms to set up new processes that will involve peer group comparison (under MiFID, AIFMD and the UCITS Directive) and comparison against supervisory benchmarks (under IDD);
   
• significant changes to inducement tests (and the ability for Member States to impose an inducement ban or to restrict third party inducements to certain products or services);
   
• enhanced costs and charges requirements, including the introduction of a standardised template for costs and charges disclosures to retail investors;
   
• changes to suitability and appropriateness assessments; 
   
• new requirements in respect of marketing communications and practices, including on the use of finfluencers; 
   
• enhanced oversight of EU firms providing cross-border services, as well as the oversight of overseas firms targeting investors in the EU through digital means without appropriate licenses;
   
• changes to client categorisation requirements; and 
   
• changes to the PRIIPs Regulation, including the addition of a new “Product at a glance” section within the PRIIPs KID, the introduction of comparison tools for multi option products and the potential for layering of information provided in the PRIIPs KID.

The package still needs to be officially endorsed by the European Parliament and complete legal / linguistic review, before being formally adopted and published in the Official Journal (not expected before Q4 2026). Most of the changes are due to apply 30 months after Official Journal publication (i.e. around Q2 2029), although some changes (including to the scope of the PRIIPs Regulation) will apply 20 days after Official Journal publication.

Read our summary note of the key changes here.