The fifth round of RIS trilogues took place on Tuesday 25 November. Below, we provide a summary of the discussions, key outcomes and the current status of negotiations. Whilst no further agreements were reached, discussions advanced meaningfully. The next trilogue is planned for Wednesday 17 December, at which there is growing expectation that an agreement will be reached on all outstanding points.
Value for Money (VfM)
Status: No agreement reached yet. To be discussed further at next trilogue.
Fifth trilogue: The co-legislators are converging around the European Commission's (the Commission) dual approach proposal, i.e. using EU supervisory benchmarks under the Insurance Distribution Directive (IDD) and peer group benchmarking under MiFID II. Key points of contention included:
The scope of Level 2 and 3 empowerments for defining benchmarks and peer-group methodologies.
The treatment of multi-option products (MOPs), with the Commission advocating for a holistic approach to avoid double assessment of underlying funds and wrappers.
The extent of data reporting, particularly regarding distribution costs. The European Council (the Council) emphasised data gaps and proposed targeted additional reporting, while the Commission argued that firms already possess and disclose this data to clients.
The publication of benchmarks: The Council and European Parliament (the Parliament) agreed benchmarks should remain a supervisory tool and not be published, but firms must have sufficient transparency to understand supervisory expectations. The Commission, however, maintained that full transparency is necessary for legal certainty.
The application of peer groups: The Parliament suggested a national-level approach initially (i.e. peer groups limited to where the products are distributed), but both the Commission and Council advocated for an EU-wide approach. The Commission also opposed grandfathering existing national benchmarks, citing concerns over market fragmentation.
The Council proposed a partial exemption for structured products and specific types of transferable securities so they only need to compare costs, not performance.
Inducements
Status: No agreement reached yet. To be discussed further at next trilogue.
Fifth trilogue: The Council's revised inducements test is emerging as the likely compromise. Key issues included:
Level 2 empowerments: The Council prefers a principles-based test at Level 1, with Level 2 limited to specifying "tangible benefits" and reclaim mechanisms under IDD. The Commission insists on broader Level 2 mandates for harmonisation and supervisory consistency.
Member State optionality: The Council reaffirmed the need for Member States to retain the ability to impose stricter inducement requirements at the national level, a position opposed by the Commission due to concerns over single market fragmentation.
The Parliament signalled willingness to make concessions on inducements if paired with movement from the Council on VfM, but emphasised that inducements and VfM should be assessed as a package.
Client categorisation
Status: Provisional agreement reached in fourth trilogue.
Fifth trilogue: No further discussion. 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.
Customer journey
Status: Provisional agreement on certain elements; further discussion required.
Fifth trilogue: The MiFID client-level warning under the appropriateness test will be maintained, but firms will be free to design their own risk warnings as the ESAs' Level 2 mandate to standardise these has been removed. Broader discussions on suitability and appropriateness frameworks are postponed to the next trilogue. There was no agreement reached on whether or not to delete the best interests test or whether or not to remove risk warnings.
Undue costs
Status:Provisional agreement reached in fourth trilogue
Fifth trilogue: No further discussion. 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 Key Information Document (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.
PRIIPs
Status: Broad provisional agreement reached on most elements, subject to technical refinements and endorsement at the next trilogue. Co-legislators will look into a "reasonable, but ambitious" timeline by which RTS would need to be in place.
Fifth trilogue: Key outcomes included:
It was agreed that past performance will be the default presentation in the KID, with a recital clarifying that future performance scenarios may only be used in exceptional cases.
It was agreed that the "Product at a Glance" dashboard will be retained, but is restricted to essential information only, and the KID will still be limited to a maximum of three pages. The existence of financial guarantees will be excluded from this section.
It was agreed that the comprehension alert should be deleted from KIDs.
It was agreed that the sustainability section should be removed from RIS, with a recital clarifying that sustainability disclosures will be addressed through the ongoing SFDR review, see our client note on that here.
Agreement was reached that KIDs should be machine-readable, with reinforced mandates for the ESAs to support digital accessibility and improved data usability.
Decisions on the PRIIPs online comparator and voluntary personalisation tool have been deferred to the next trilogue, with both the Council and Commission currently opposed. There is some industry concern about how burdensome these tools could be on firms, even if the personalisation tool were to be voluntary.
What's Next?
The next trilogue is scheduled for 17 December 2025. There is cautious optimism that political agreement on the Level 1 text could be reached by year-end, with technical work to follow. Key issues for resolution include the final approach to VfM, inducements, and the customer journey, as well as the outstanding elements of the PRIIPs regime.
For earlier background, you may want to read our earlier RIS Views which can be found on our RIS Hub Page.
We will continue to monitor developments and provide updates as the negotiations progress.
