Product Intervention: Keystone of the EU Investor Protection Regime

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As from January 2018, MiFIR and the PRIIPs Regulation explicitly provided national supervisors with competences to adopt measures restricting or limiting financial activities or practices or the marketing, distribution or sale of financial instruments, structured deposits and insurance-based investments. In a number of Member States, including Belgium, the national supervisor had already been granted this power by national regulation. MiFIR and the PRIIPs Regulation, however, uniformize the conditions for taking such measures. Moreover, those regulations give competences to ESMA, EBA and EIOPA to coordinate and facilitate such measures, in order to safeguard the level playing field. On top of those competences, these European Supervisory Authorities can now also temporarily prohibit or restrict the same products, activities or practices directly in the entire Union. In this contribution we first offer a discussion of the historical evolution of product intervention, including an overview of national measures taken by a number of Member States before the entry into force of the MiFIR and the PRIIPs Regulation. Next, the contents and application of the MiFIR and PRIIPs product intervention rules are scrutinised. Finally, we take a critical look at the scope of application of these provisions. We conclude that the MiFIR and PRIIPs product intervention measures are the keystone of the EU investor protection regime. The prevailing restrictive interpretation of the personal scope of application of the MiFIR product intervention measures could, however, partly undermine their efficiency. In this contribution we have argued that such interpretation is based on an incorrect reading of the scope of application of the MiFIR.