On 12 June 2024, the Council of the EU issued a press release stating that it had agreed on its position on the Retail Investment Package. With this agreement, the Council is ready to engage in negotiations with the European Parliament on the final shape of the legislation.

The press release notes the following main changes proposed by the Council:

  • The Council decided to remove the proposed ban on ’inducements’ received for execution-only sales (where no advice is provided to the investor). It has also strengthened certain safeguards accompanying all inducements including an inducement test that applies where there is no ban on inducements and a new uniform test specifying the duty for advisors to act in the best interest of the client.
  • The Council has added ‘overarching principles’ to be respected when paying or receiving inducements. According to these principles, inducements should not incentivise firms to recommend particular products over others, they should not be disproportionate to the value offered and inducements paid to or accepted and retained by entities belonging to the same group should be treated in the same way as others.
  • The Council introduces a new concept of ‘Value for Money’ whereby manufacturers and distributors would assess whether costs and charges related to a product are justified and proportionate with regard to their performance, other benefits and characteristics, their objectives and, if relevant, their strategy.
  • The Council agreed that the European Supervisory Authorities would develop EU supervisory benchmarks but instead of mandatory benchmarks integrated in manufacturer’s and distributors’ product governance processes, they would be a supervisory tool, developed in a way that helps Member State competent authorities detect investments products that fail to offer value for money. As the benchmarks would be used as supervisory tools they would not be directly binding on manufacturers and distributors.

The Council has also published texts of the Omnibus Directive and the Regulation amending the PRIIPs Regulation.