Joint Committee of ESAs holds its first Consumer Protection Day

The Joint Committee of the European Supervisory Authorities (Joint
Committee) held its first Consumer Protection Day on 25 June 2013 in
Paris.

Consumer protection is a major objective for the European Supervisory
Authorities (ESAs – EBA, ESMA, EIOPA) and under the auspices of the
Joint Committee, they continue to place this high on their agenda for
2013.

The aim of the event was to provide a forum for exchange and discussion on
important and current cross-sectoral consumer issues.

The Joint Consumer Protection Day attracted around 250 consumer
representatives, academics, legal and financial consultants, national
supervisors, experts from the EU institutions and financial services
industry (banking, securities, insurance and pensions).

In his opening speech Gabriel Bernardino, Chairman of EIOPA and the current
Joint Committee Chair, called for regulatory consistency across the three
financial sectors and urged the application of sound conduct of business
practices by market participants. He also spoke about the emergence of a
new paradigm on transparency and fairness towards consumers. "In order
to regain trust and confidence by consumers, financial institutions need
to develop simpler and more understandable products, devote further
attention to the fairness of contractual conditions and definitely they
need to review the charges and commissions applied ensuring that they are
not disproportionate", he said.

During the panel discussion on PRIPs (proposal for a 'Regulation on key
information documents for investment products') participants discussed
the scope of the proposal together with considerations as to personalise
the so-called Key Information Document enabling comparison between covered
products (e.g. by including national information on tax implications). The
importance of behavioural finance in product disclosure was also addressed
and views were shared on which kind of information consumers generally
need in order to take informed decisions on whether to buy or not to buy a
product.

Different break-out sessions on consumer trends, sales incentives and
product intervention were held.

In this respect, the panellists discussing consumer trends, agreed that the
ESAs need enhanced data collection powers to ensure data of quality with a
view to continuously collect, analyse and report on consumer trends. The
usefulness of comparison websites and payment protection instruments, two
current trends in some of the financial sectors, was highlighted whilst
focus was given to the consumer detriment also surrounding these types of
distribution channels and instruments.

On the topic of sales incentives, it was felt that in order to avoid
mis-selling of financial products, several changes in sales culture are
urgently required.

On product intervention, participants debated whether these powers would
have the most value as a 'threat' in influencing firms to act in the
best interests of their clients, and that product intervention should be
seen in the round, as part of product design, product governance, and
product distribution in order to address consumer protection issues before
and up to point of sale, rather than playing catch-up after products hit
the market.

Summarising the panel discussions, Andrea Enria, Chairman of EBA, said:
"Today's conference has stimulated a lively and fruitful discussion.
The ESAs will continue to join forces to identify cross-cutting issues and
to address them jointly to the benefit of consumers across the EU".

Steven Maijoor, Chairman of ESMA, in his closing remarks, indicated:
"Whilst the financial crisis is mainly a stability crisis, and the
regulatory response has been focussed on stability issues, we must not
lose sight of our mandate, at European level, to promote the interests of
consumers and to ensure a high level of consumer protection. But
delivering on protecting consumers' needs buy-in from industry (and
consumers) too.

"It is not all about regulation, supervision and enforcement. Industry
should internalise clients' interests and business models need to focus
better on client needs".

Click here to view the full text of Gabriel Bernardino's speech at the
Consumer Protection Day:
https://eiopa.europa.eu/press-room/speeches-presentations-and-interviews/index.html
(Link:
https://eiopa.europa.eu/press-room/speeches-presentations-and-interviews/index.html
)


This newsletter was sent to you by:

EIOPA
WesthafenTower | Westhafenplatz 1 | 60327 Frankfurt | Germany
Phone: +49 69 951119-20
Fax: +49 69 951119-19

info@eiopa.europa.eu
https://eiopa.europa.eu

---

Don't want to receive this newsletter anymore?

Please login to the Restricted Area of the EIOPA website and change
your user profile:

https://eiopa.europa.eu/restricted-area/index.html

If you forgot your password, you will find a link to receive a new
password on the login page of the EIOPA Restricted Area.