European Protection of Retail Investors in Insurance-Based Investment Products: Product Interventions under PRIIPs
Abstract
The main goal of the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs) is to enhance investor protection standards for retail investors, in particular enabling them to better understand and compare the key features, risk, rewards and costs of different PRIIPs, through access to a short and consumer-friendly Key Information Document (KID). The regulation does not regulate advertisement information and does not aim to intervene in the measures associated with particular products otherways than in connection with the investment component.
However, it contains authorisation for both EIOPA and the national regulators to set up remediation measures and restrict the distribution of particular products with investment component or particular types of financial activities. PRIIPs thus presents a kind of negative regulation of product development.
The envisaged intervention mechanism is similar to those established in the framework of MiFID II and MiFIR. The authors mainly use the research methods of legal comparison, critical analysis, synthesis and deduction.
The objective of the study is to clarify the impact of the above-mentioned rights of the regulatory bodies to the autonomy of will and the freedom of contract. The result of this study implies that the restrictive measures envisaged by PRIIPs may be applied only ultima ratio and are associated with private law liability.