The EU’s Retail Investment Package isn’t actually MIFID III – but it may as well be for retail firms
Acronym fans received a treat this year as the EU unveiled the third version of its Payment Services Directive (PSD3) and unveiled a proposed new package of regulations formally known as its Retail Investment Package, but commonly referred to colloquially as ‘MIFID III’.
With PSD3 mostly concerned with updating the plumbing of the European financial system, it’s the latter that’s of most interest to financial communicators.
In a very EU way, it’s a set of new regulations coming under its capital markets workstream, where new rules are imposed to induce Europeans with spare cash to invest it, rather than merely keep it in a bank account.
A lot of the measures are pretty technical, for example amendments to investment firms’ suitability documentation and product governance, or new thresholds for client categorisation.
However, the new package of rules for marketing communications makes for interesting reading if you’re in the business of packaging up your portfolio managers’ thoughts on markets and displaying their faultless expertise as a means of inducing people to trust your company or client with their hard-earned cash.
We’re all familiar with the very blurry line between PR and marketing, but the package seems more interested in the more novel phenomenon of so-called ‘finfluencers’. These can be at once more casual about disclaimers than more conventional comms and more sales-ey, so to nip this category’s wilder side in the bud the regulators are proposing to force companies to:
- Make marketing communications clearly identifiable and appropriately attributed to the relevant firm
- Present a balanced picture of the risks of a product
- Make clear a product’s essential characteristics
- Extend record keeping to indirect communications, not just direct
These come alongside the very, very familiar requirement to make all communications fair, clear and not misleading – words anybody who works in investment comms will be beyond familiar with.
What does all this mean?
In truth, for most established players little will change aside from a few amends to disclaimers and some revisions to back-end record-keeping practices – especially if you’re more of a B2B house.
However, for companies targeting younger investors through influencers, or those marketing products at the more exotic end of the spectrum, this package removes multiple grey areas that more cynical actors could potentially exploit. More traditional PR, however, is pretty much left totally unchanged.
The package is currently under consideration by EU co-legislators (the Council of the EU and the European Parliament). This process is expected to take at least a year, and could be impacted by forthcoming European Parliament elections in June 2024.
After that, member states will have a maximum of 18 months to apply the new provisions – so strap in.
 If you’re really into acronyms, the Retail Investment Package is actually a set of amends to MIFID II, AIFMD, the UCITS Directive, IDD, the Solvency II regulations, and PRIIPs.