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Inducements: a barrier for investors

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European Investors cannot stress enough that inducements are the single most important barrier to realising the objectives of the European Capital Markets Union.  

The regimes on inducements vary across the EU. What are inducements? It is a catch-all term. The common denominator is that the provider of investment services receives payments from parties other than his customer. For their access to investment services retail investors typically depend on advisers. The points of sale of investment services targeted to retail investors are the preeminent source of investment information and education. Consequently, there is little access to independent investment service provision. This means that there is a limited entry to investment services that are in close proximity to the capital markets and the real economy, such as low-cost ETFs, stock quoted shares and bonds. As long as inducements prevail, there is no catalyst for this situation to change drastically. 

European Investors cannot stress enough that inducements are the single most important barrier to realising the objectives of the European Capital Markets Union. The European Capital Markets Union strives to accommodate that investors find their way to all capital markets across the EU. European Investors has it on good authority that the European Commissioner responsible for the European Capital Markets Union, is seriously contemplating issuing a categoric ban on inducements in the EU. Such a ban currently exists in the Netherlands. European Investors wholeheartedly applauds this. With that in mind, European Investors wrote a letter to Commissioner McGuinness on 12 January, in which it expresses its unconditional support and appreciation for the initiative.

Click here to view the letter to Commissioner McGuinness

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