On 21 February 2022, the European Commission published a targeted consultation on options to enhance the suitability and appropriateness assessments. The level of retail investor participation in capital markets remains very low compared to other economies which is why the Commission is preparing a new retail investment strategy, which aims to take a holistic view of investor protection rules. A public consultation was launched in 2021 which stated that many stakeholders called for simpler and more client-focused ways to assess clients’ investment needs and constraints. This consultation aims to investigate ways to achieve this in particular by improving so-called suitability and appropriateness tests, which assess investors’ profiles. The consultation explores whether retail investors would benefit from a new type of suitability assessment, focused on their personal situation and investment needs, which could provide them with more support along their investment journey to better achieve their investment objectives.
The consultation is open until 21 March 2022.