EBA欧洲银行-2014-06-04-Opening-remarks-at-Joint-ESAs-Consumer-Protection-Day-2014_13页_474kb

Joint ESAs Consumer Protection Day Summary

Core Content

The Joint ESAs Consumer Protection Day was held in London on 4 June 2014, marking the second such event under the auspices of the Joint Committee of the European Supervisory Authorities (ESAs). The event aimed to focus on the practical work of the ESAs in consumer protection and financial innovation, as opposed to the more theoretical discussions of the previous year.

The Joint Committee, established on 1 January 2011, is tasked with strengthening cooperation and ensuring cross-sectoral consistency among the European Banking Authority (EBA), European Securities and Markets Authority (ESMA), and European Insurance and Occupational Pensions Authority (EIOPA). The day was structured to allow active participation from attendees, with no afternoon break-out sessions, and featured a range of presentations and panel discussions.

Main Topics and Deliverables

1. Joint Position on Manufacturers' Product Oversight and Governance

• Purpose: To develop high-level, cross-sectoral principles for product oversight and governance.
• Background: A survey was conducted among national competent authorities (NCAs) to identify issues in product development and governance.
• Findings: Many manufacturers failed to implement proper oversight, leading to consumer detriment, loss of confidence, and prudential risks.
• Outcome: The Joint Committee endorsed a set of principles, which will serve as a foundation for more detailed guidance from each ESA in their respective sectors.
• Panel Discussion: The topic will be further explored in a panel discussion with the three ESA Chairs, moderated by Anneli Tuominen.

2. Guidelines on Complaints Handling

• Objective: To ensure a consistent approach to complaints handling across banking, insurance, and investment sectors.
• Development: ESMA and EBA developed guidelines based on EIOPA’s insurance guidelines and the G20’s principles on financial consumer protection.
• Consultation: A consultation paper was published in November 2013 and received 31 responses by February 2014.
• Endorsement: The guidelines were endorsed by the Boards of ESMA and EBA and will be translated into all EU official languages.
• Implementation: Financial institutions and national competent authorities are expected to comply with the guidelines.

3. Ongoing Work Streams

a) Self-Placement of Loss-Absorbing Instruments

• Context: Financial institutions are placing high-quality capital instruments with retail investors, often under the guise of safety.
• Observations: These instruments, such as CoCos, are being sold with misleading claims about safety and are not always suitable for retail investors.
• Risks: Consumers may be exposed to misleading information, unsuitable advice, and aggressive selling tactics.
• Regulatory Concerns: The ESAs are concerned about the misalignment of these instruments with the actual risk they pose and are planning to publish their views on this issue.

b) Cross-Selling Practices

• Focus: The Joint Committee is addressing cross-selling practices, which are common across the banking, insurance, and investment sectors.
• Rationale: These practices can lead to consumer detriment and are not always aligned with the principles of fair treatment and transparency.
• Regulatory Frameworks: Relevant regulations include the Mortgage Credit Directive, MiFID2, and the proposed Insurance Mediation Directive 2 (IMD2).
• Guidelines: The ESAs aim to develop guidelines that will help supervise cross-selling and protect consumers across sectors.
• Presentation: Verena Ross of ESMA will present the findings related to cross-selling in the afternoon.

c) Packaged Retail Investment and Insurance Products (PRIIPs)

• Development: The political agreement on PRIIPs was reached in April 2014, following a vote in the European Parliament.
• Regulatory Technical Standards (RTS): The ESAs are developing three RTS:
  • Main RTS on the content and presentation of Key Information Documents (KID).
  • Two subsidiary RTS on the revision and review of KID, and the timing of delivery.
• Consumer Testing: KID content will be tested with consumers to determine the most appropriate structure.
• Next Steps: A discussion paper will be published later in 2014, and a consultation paper in 2015. A consultative expert group will also be established.

Key Information

• The event emphasized the importance of stakeholder engagement, especially from consumer representatives.
• The ESAs are committed to improving consumer protection by ensuring clarity in legislation, enhancing oversight, and promoting fair practices.
• The Joint Committee is playing a pivotal role in harmonizing regulatory approaches across sectors and developing consistent guidance.
• The focus on financial innovation and product governance reflects the evolving nature of financial services and the need for adaptive regulatory frameworks.