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Draft legislation designed to protect retail investors was rejected by MEPs on Wednesday as so “flawed and misleading” that it could actually lose them money. Unusually, it will be returned to the EU Commission for revision.

MEPs passed a resolution calling for changes to legislation on “packaged retail and insurance-based investment products” (PRIIPs) -- a market worth up to €10 trillion in Europe - by 602 votes to 4, with 12 abstentions.

Retail investors typically use PRIIPs to generate funds to pay a mortgage or for their children’s education.

Parliament backed the view of its Economic and Monetary Affairs Committee that proposed regulatory technical standards (RTS), which investment providers must meet to provide greater transparency and clarity to investors - are inadequate.

The Commission will now have to propose new RTS for implementing the PRIIPs legislation which is due to come into force on 31 December 2016.  

Procedure:  Legislative resolution (scrutiny of delegated acts)