The FSA has published its response to the European Commission’s call for evidence on the need for a coherent approach to product transparency and distribution requirements for ‘substitute’ retail investment products (the Response). In the Response the FSA states that it believes that it is preferable to find national solutions to level-playing-field issues rather than to regulate at an EU level. This is for several reasons:

  • The volume of cross-border retail investment business is extremely small, suggesting that harmonising regulation at EU level is not essential.
  • It is easier for national regulation to take account of cultural preferences and regional product variations.
  • National differences in taxation, rather than differences in regulation, appear to have a significant impact on product sales.
  • There is a range of distribution structures across the EU, which would be difficult to take into account in regulations designed at EU level.

View FSA response to the Commission’s call for evidence on the need for a coherent approach to product transparency and distribution requirements for ‘substitute’ retail investment products, (PDF 147KB), 23 January 2008