Retail investors and investment consumer rights activists concerned about the implications of the European Parliament’s handling of the retail investment package can rest easy, said rapporteur MEP Stéphanie Yon-Courtin in response to questions from Investment Officer. The package will come up for a vote at the Parliament’s Committee on Economic and Monetary Affairs on the evening of Wednesday, 20 March.
Rapporteur Yon-Courtin portrayed herself as being laser-focused on bringing in less controversial consumer protection by making the financial industry comfortable.
Yon-Courtin is certain that the Economic and Monetary Affairs committee will reach a deal allowing the legislation to be passed by the April legislative deadline. “We are still right on track,” she said. “It will be intense but I am very optimistic on voting on our European Parliament’s position before the end of the parliamentary mandate.”
Tight schedule
Yon-Courtin is a French lawyer from Normandy specialised in European business law. She became an MEP in 2019 on a ticket for the Renaissance party, part of the liberal Renew Europe group.
“We are negotiating this text in a very tight schedule and we are moving fast,” she said to Investment Officer. In an earlier response, her office explained there had been delays caused by the translation process. Yon-Courtin emphasised that the heavy translation workload had been driven by the level of political interest in the legislation.
“Indeed, there were some delays in translation procedures, in light of the high engagement of MEPs which tabled more than 1000 amendments to the text! This just shows the importance of this file.”
No gutting
Yon-Courtin rejected the idea that she had in essence “gutted” the legislation, removing the substantial elements of the ban on inducements and the ‘value for money’ proposal.
“I do want to highlight that the RIS goes way beyond” the value for money proposal and inducements ban, she said.
Yon-Courtin took issue with the suggestion that she had the financial industry’s interests in mind when she struck out the elements that the industry opposed.
Hearing everybody
“I did not specifically ask the financial industry to provide us with suggestions, but as the rapporteur, my role is to hear everybody out, be it the private sector (companies, consumer organisations, NGOs) or the public sector.”
She said the critics were after the wrong person. “The Commission was the one consulting the industry to suggest and draft alternatives on topics related to the Retail Investment Strategy.”
She said her colleagues all share the same objective: “finishing to build our capital markets union, having consumers more engaged in financial markets if they wish to do so and more comfortable in the financial environment to take decisions more serenely.”
Market part of process
But she said, this must be balanced, she argued, by the imperative “to ensure that market actors are part of the process and part of the change by making the measures we agree on feasible.”
She explained that finding a way to agree on these issues will require “multiple discussions”.
She repeated her commitment to some far less controversial and more industry-friendly positions on “forum-shopping”, “obliging companies to be established where they pursue their activities because this is how consumers can also more easily follow up if they have an issue” and online financial influencers, which she characterised as victimising consumers through miss-selling activities.
Financial advisors
She also called for an increase in the quality and content of the yearly training of financial advisors, including a “dedicated amount of hours to sustainability issues.”
Yon-Courtin took issue with a statement from Better Finance, a European investor interest group included in a recent Investment Officer article. Arnaud Houdmont, the organisation’s director of communications, had been pessimistic about the passage of the legislation by the end of the current EU Presidency.
Diluted strategy
“If adopted before the next legislature, it would likely result in a diluted RIS and the maintenance of the status quo, favouring the interests of a small group of vested interests,” Houdmont said earlier.
“I think that we will be far from a status quo at the end of negotiations,” said Yon-Courtin, who was quite proud of her draft report, which she said had “already made some head turns with some strong positions I took.”
Yon-Courtin took issue with suggestions that she’s disposed of controversial Commission proposals that had met with fierce financial sector resistance. “Some of them, such as value for money, are set to evolve with negotiations.”
No building on imperfection
However, she made clear that she had no regard for the Commission’s compromise proposal of value-for-money (in place of a comprehensive ban on inducements, also strongly resisted by an industry which has become used to having that money flow.)
“There is no purpose to start building on something that is imperfect. The idea is to start from ground zero, start fresh, to have new and ambitious rules,” she said. She did not explain how a legal principle can be “imperfect.”
She firmly rejected the Better Finance position. “I don’t believe we will end negotiations with a status quo but more so with a system that will both protect European consumers and put in place feasible rules for our companies.”
After passage in the Economic and Monetary Affairs committee, the legislation passes into the EU trilogues, informal tripartite negotiations on legislative proposals.