Conservative MEP Syed Kamall is fighting against the European Commission including pensions in its regulation on packaged retail investment products, saying it would be “regulatory overkill” with serious unintended consequences for auto-enrolment.
Prips will introduce a standardised key information document for packaged retail investment products across the European Union. A leaked draft of the regulation makes reference to covering products “recognised as having the primary purpose of providing an income in retirement”.
The commission, which is expected to publish its final proposals for the regulation in June, says this is from a “very early working level draft” and the scope of the directive is “very much still under review”.
Speaking to Money Marketing, Kamall, who is Shadow rapporteur on the regulation, says he supports its intention to streamline disclosure standards but he is yet to be convinced that pensions should be included.
He says: “I can understand why some might think pensions should be included, since they are one of the most important investments an individual makes in their lifetime. However, this seems to be a case of regulatory overkill with serious unintended consequences, in particular for the UK’s auto-enrolment scheme.”
Kamall’s comments come after Association of British Insurers director of financial conduct regulation Maggie Craig warned it would be “hugely disappointing and counterproductive” if Prips creates a barrier to pension auto-enrolment.
Economic and monetary affairs committee member and French Socialist MEP Pervenche Beres will be the rapporteur for the regulation and will guide it through the European parliament. Sources in the parliament say even if the commission looks to exempt pensions from Prips, Beres is likely to push for them to be included.
Anand Associates managing director Bhupinder Anand says: “The Prips regulations will be of little benefit to investors in the UK, where there is already a good disclosure regime for investment products.”