Europe has one of the highest individual savings rates in the world. However, the level of retail investor participation in capital markets remains low compared to other economies, with a majority of savings kept in bank deposits and traditional saving products, generating low or even negative real interest rates with the current level of inflation.

Developing retail investment in order to ensure that EU citizens benefit from the investment opportunities offered by capital markets and that EU enterprises have access to more adequate long-term funding is one of the main objectives of the CMU.

A Retail Investment Package (RIP) was proposed by the Commission in May 2023 aiming to empower retail investors to make investment decisions that are aligned with their needs and preferences and to encourage more retail participation in capital markets, while ensuring that investors are treated fairly and duly protected.

The measures proposed address some key issues that hinder retail investment at present, notably in terms of trust, potential conflicts of interest, value-for-money and financial literacy and also aim to adapt the retail investment framework to the digital age. The RIP package includes a wide range of measures in four main areas, covering the entire investment journey of retail investors: (i) product distribution and advice; (ii) product disclosures and information; (iii) investor education and access; and (iv) supervisory cooperation.

These measures are included in two texts, which amend existing legislation to take into account these new requirements and improvements:

• An amending Directive, which revises the current rules set out in the MiFID II, IDD, UCITS, AIFMD and Solvency II Directives
• An amending Regulation which revises the PRIIPs Regulation