Proposals for Better Management of Non-Financial Risks within the European Fund Management Industry

Proposals for Better Management of Non-Financial Risks within the European Fund Management Industry - December 2012

2. Key Topics on the European Regulatory Agenda

of financial instrument that is being offered and, consequently, to make investment decisions on an informed basis. It is doubtful that the information on non-financial risk currently made available to investors is sufficient to allow non-advised sales unless one adopts a low standard for what constitutes an informed decision. For the same reason, it is unfortunate that products deemed non complex (such as UCITS other than structured UCITS in the context of MiFID II) will fall under the execution only exemption. With such limited information on the materiality of non-financial risks, advised sales will not be without liability risks to the firm providing the service.

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An EDHEC-Risk Institute Publication