EU RIS View: October 2025 (Part 2)

The fourth round of RIS trilogues took place on Tuesday 21 October. Below, we provide a summary of the discussions and their current status. A Council Working Party (CWP) meeting is scheduled for Wednesday 19 November, with the next trilogue planned for Tuesday 25 November.

Value for Money (VfM)

Status: No agreement reached yet. To be discussed at next trilogue.

Fourth trilogue: The area where co-legislators seem to be the furthest apart is VfM. It is likely that in the next trilogue the co-legislators could coalesce around the Commission’s dual approach of using peer group benchmarking for investment funds and European supervisory benchmarks for Insurance-Based Investment Products (IBIPs), as long as additional data requirements are kept to a minimum, supervisory benchmarks are not fully published and Level 2/3 is kept at a minimum.

Inducements

Status: No agreement reached yet. To be discussed at next trilogue.

Fourth trilogue: Member States still want to maintain the inducements test and the ability to gold-plate, which the Commission opposes. The Presidency wants minimal Level 2 measures whereas the Commission has concerns about ‘suppressing’ Level 2 measures. The Council sees a need for clarity on certain terms such as “tangible benefits”. The Parliament is still shaping its position.

Client Categorisation

Status: Provisional agreement reached.

Fourth trilogue: The co-legislators have agreed on a compromise position where a client could be categorised as an elective professional client where they meet:

1. One of three alternative criteria for transaction frequency: 15 transactions annually over the last three years; 30 transactions in the past year; or 10 transactions of at least €30,000 in unlisted companies in the past year; and

2. A wealth threshold of €250,000; or

3. The work experience and training/education criteria.

There is some concern in the market that, the way the test is currently drafted, means that criterion 1 (transaction frequency) is always required, in combination with either criterion 2 (wealth threshold) or criterion 3 (work experience/education). There are concerns about the lack of flexibility that this may entail. This may be ironed out in the technical text drafting.

There has also been agreement on having an automatic opt-up for managers and directors who are subject to a fit and proper assessment under existing regulations and for fund managers or other employees of AIFMs where they are holding or acquiring shares of the specific fund they manage or market.

Customer journey

Status: No agreement reached yet. To be discussed at next trilogue.

Fourth trilogue: The Council presented its most recent simplification proposals including eliminating the best interest test entirely, extending the suitability-light regime to non-independent advisors and removing proposals for additional risk warnings. The Commission was not in agreement, citing concerns about safeguarding for investors. The Parliament is still shaping its position.

Undue costs

Status: Provisional agreement reached.

Fourth trilogue: The co-legislators have chosen to take forward the Commission’s definition of due costs (i.e. being in line with disclosures in the prospectus and the PRIIPs KID and be limited to “necessary costs”), the Council’s approach on access to compensation (i.e. NCAs should address undue costs via the manager and investors in their supervisory activities, rather than via enforcement claims) and the Parliament’s proposal to impose a materiality/de minimis threshold for compensation. No mandatory fee cap has been imposed, which will be welcomed by the industry.

What's Next?

The CWP will meet on Wednesday 19 November, with discussions on VfM, inducements, the customer journey and Article 8 of PRIIPs continuing at the next trilogue on Tuesday 25 November. There is growing optimism that agreement on the Level 1 text could be reached by the end of Q4 2025, with rules potentially coming into effect in 2027. We hear that the Danish Presidency is keen to push forward the proposals and reach agreement before the end of the year, before the Cypriot Presidency takes over in 2026. Therefore the Danish Presidency may be open to compromise in order to push this through.

For earlier background, you may want to read our earlier RIS Views which can be found on our RIS Hub Page.

We'll keep you updated as we hear more.