Ignites Europe (Financial Times) I MEPs make last-ditch attempt to salvage retail strategy

MEPs are meeting to try to hammer out a compromise position in a bid to salvage the EU's troubled retail investment strategy. 

A political meeting between representatives of different groupings in the European Parliament will take place this week, with views polarised on the merits of fund value for money benchmarks and a proposed ban on the payment of inducements to some intermediaries. 

The meeting is seen as crucial if MEPs are to develop a shared position ahead of a vote on the retail investment strategy in March. 

If the retail investment strategy is not approved in a plenary vote before the end of the current EU legislative cycle, proposals from the strategy could be substantially overhauled when policymakers regroup, according to people with knowledge of the situation. 

Stephanie Yon-Courtin, a French MEP from the Renew Europe grouping and lead rapporteur for the retail investment strategy, says this week's meeting will see a number of options for the most controversial parts of the strategy "on the table". 

Yon-Courtin says various options including requiring funds to complete internal value assessments, comply with EU value benchmarks or having no value benchmarks at all will be under consideration by MEPs. 

Meanwhile MEPs will also debate the merits of a full ban on inducements, a partial ban on inducements or no inducement ban at all, according to Ms Yon-Courtin. 

While MEPs from the Greens and the Socialists & Democrats groupings have called for a full ban on inducements, Yon-Courtin has proposed that the European Commission's proposal to introduce a partial ban on inducements when no advice is received should be scrapped entirely. 

"I don't believe a partial ban is the answer [...] a partial ban would be as problematic as a full ban," she says.  

Yon-Courtin says it is crucial that MEPs come to a shared agreement on the retail strategy before breaking up for parliamentary elections in June as implementation of "one of the pillars of the capital markets union cannot wait". 

"If we wait we will lose one to two years because we will have to start again," she says. 

MEPs have already begun putting together an agreement on less contentious parts of the retail investment strategy, according to a person with knowledge of the situation. 

EU finance ministers are also due to meet at the end of the month to discuss a common approach to the retail investment strategy.

Ignites Europe previously reported that the Belgian presidency of the EU had announced that it will not be prioritising the retail investment strategy before the end of the legislative cycle as the package has not yet entered the trilogue stage. 

A Brussels-based lobbyist, speaking on condition of anonymity, says the unpopularity of the commission's proposals with many EU member states means agreement in the European Council is unlikely. 

Asset managers have previously lobbied against many of the proposals in the strategy, including the proposed value for money benchmarks, warning that comparing all funds on the same cost benchmark would mislead investors and reduce choice.