EU Retail Investment Strategy

New rules aim to safeguard and empower retail investors

1. What’s the background?

On 24 May 2023, the EU Commission published the final version of its Retail Investment Strategy and Annexes (RIS). This also included a related but separate document proposing minor amendments to the PRIIPs Regulation.

While the RIS is an independent initiative, it builds on prior efforts under the EU Commission's broader 2020 Capital Markets Union Action Plan, now rebranded as the Savings and Investments Union, see our article on that here. The SIU Plan aims to improve retail investors' access to financial markets while ensuring robust investor protection. The RIS is the first significant proposal under this iteration of the SIU Plan and has sparked considerable debate, particularly around inducements and product governance.

The RIS proposes wide-ranging changes to the retail client framework, including amendments to MiFID, PRIIPs, AIFMD, and UCITS from a product governance perspective. It also seeks to align the Insurance Distribution Directive (IDD) and Solvency II with MiFID. The core objectives of the RIS are to empower retail investors to make investment decisions that are aligned with their needs and preferences while ensuring that they are treated fairly in order to restore investor confidence. However, this version of the RIS is just the starting point. As a proposal from the EU Commission, it must now undergo the EU legislative process, requiring approval from both the EU Parliament and the Council before becoming law. This process is likely to result in further changes, meaning the final version could differ significantly from the Commission's initial proposal.

2. What’s the latest state of play?

Parliament: The European Parliament's ECON Committee approved its final report on 20 March 2024, which formed the basis of Parliament's negotiating position. This position was subsequently endorsed by the Parliament on 23 April 2024. Following the EU MEP elections in June 2024, a newly configured Parliament was established. Notably, MEP Stephanie Yon-Courtin, the lead rapporteur for the RIS, was re-elected and continues to lead the Parliament's negotiating position in trilogue discussions with the Council.

Council: The Council adopted its negotiating position on 12 June 2024 under Belgium's Presidency, using a "silence procedure" to expedite agreement. However, political tensions during Hungary's Presidency in H2 2024 hindered progress. The file was passed to Poland's Presidency in January 2025, and subsequently to Denmark's Presidency on 1 July 2025. 

Trilogues: The first trilogue meeting took place on 18 March 2025, focusing on simplification. The Commission was tasked with preparing proposals on value for money, disclosures, and best interest/suitability, which were delivered in May 2025. The second trilogue meeting was held on 17 June under the Danish Presidency. Key areas of divergence between the Parliament and Council include value for money, inducements, regulatory powers, and implementation timing. The third trilogue session took place on 23 September 2025, where progress was made on the Client Categorisation rules and provisional agreement was reached on authorisation procedures. The fourth round of RIS trilogues took place on 21 October where provisional agreement was reached on undue costs and client categorisation. A Council Working Party (CWP) meeting is scheduled for 19 November, with the next trilogue planned for Tuesday 25 November.

3. What's the timing?

The final version of the level 1 legislation is unlikely to be published before H2 2025. While trilogues have commenced, progress has been slow. The Council's Polish Presidency opted not to advance to a second trilogue, leaving the Danish Presidency to take the lead from 1 July 2025. If a final text is agreed upon in H2 2025, the RIS rules could come into force in 2027. However, this timeline depends on the outcome of negotiations, particularly regarding implementation timing. Additionally, level 2 measures, including delegated acts and technical standards, will need to be developed to provide detailed guidance for firms.

Given the contentious elements of the RIS, such as inducements and product governance, as well as the broader push for simplification, the legislative process is expected to be protracted.

4. What do we need to do now?

While immediate business changes are not required, it is crucial to monitor developments as the RIS progresses through trilogues. Firms should also consider aligning with relevant lobbying efforts to ensure their interests are represented.

Subscribe to our EU RIS View on our EU RIS Hub for updates as and when developments happen to keep abreast of the changes!