Towards an EU Charter for the Protection of End Users in Financial Markets

Abstract

The program, and the proposals, to be found in this paper, stem from various reflections elaborated during recent years on the approach that EU financial legislation follows in relation to the protection of “clients” in different contexts. Moving from the assumption that there is no single notion of “client” in the current state of the legislation across different sectors, and that the techniques that are employed by the architraves of EU financial legislative texts vary greatly from one field to the other, there seems to be developing a core of fundamental, general principles for the protection of – broadly speaking – “users” of financial services and products, which is the result of a process of cross-sectoral circulation of rules and standards. This movement, which can be observed across the entire range of EU financial rules, is mostly the result of the expansive force of MiFID conduct rules, as they developed overtime. Other principles are also gaining momentum on a cross-sectoral basis, such as those pertaining to the intense debate on ESG finance and clients’ preferences and expectations in this respect. There may be sufficient grounds to consolidate those principles – which are, indeed, already visible - in a General Charter for the protection of financial users in EU legislation, to be intended on a cross-sectoral basis. The Charter would not be aimed at overcoming sectoral-specific legislation, which remains necessary because of the different approaches, and goals, to be achieved in each context (as shown in the previous paragraphs), but it would identify overreaching, mandatory standards valid throughout the entire range of financial services, products, activities. It might help reducing inconsistencies and non-justifiable differences between different sectors and be of high political value, clearly placing the direct protection of customers, clients, investors, policyholders at the centre, and at the core, of the objectives of EU financial legislation.

Keywords: CRDIV, MiFID II, IDD, Solvency II, consumer protection, investor protection, PRIIPS, ESG

JEL Classification: K20