Response to second ESA Joint Committee's consultation on PRIIPs
Finance Watch comments on the Technical Discussion Paper on Risk, Performance Scenarios and Cost Disclosures in Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs)
Brussels, 17 August 2015 - Finance Watch welcomes this important consultation and salutes the excellent work done by the ESAs.
We hope to see follow up work on other key elements of the PRIIPs framework in future consultations, notably the comprehension alert, since this is an essential and complementary tool in our view to reduce the risk of mis-selling.
Past consumer protection issues such as children's toys with lead or cars that can overturn were not addressed simply by disclosing a higher risk grade on the information document and ensuring unbiased sales advice. Similarly, packaged products with features shown to be detrimental to retail investors should arguably not be sold or at the very least have a clear prominent warning.