Retail Investment Strategy (RIS) – complete overhaul of the investment framework or strategic retreat?

The package of measures presented by the European Commission in May 2023 under the banner ‘Retail Investment Strategy’ (RIS) seeks to address identified shortcomings in the Capital Markets Union (CMU), an economic policy initiative launched by the Commission in July 2014 with the aim of deepening and further integrating EU capital markets into a single market. To support the underlying objectives – unlock funding for Europe's growth while ensuring that consumers can fully benefit from investment opportunities – with an adequate regulatory framework, the RIS package comprises two legislative proposals: (i) an Omnibus Directive amending various sector-specific financial services Directives (MiFID, the Insurance Distribution Directive (IDD), Solvency II, the UCITS and AIFMD Directives) and (ii) a Regulation amending the PRIIPs Regulation. 
 
After the European Parliament agreed its negotiating mandate on both proposals in April, the Council followed suit in June 2024, paving the way for interinstitutional negotiations on the final shape of the legislation. In the significantly revised drafts released on that occasion, the Council for example removed the proposed ban on ’inducements’ received for execution-only sales (i.e. where no advice is involved), while reinforcing the related safeguards by introducing ‘overarching principles’ to be respected. A new concept of ‘value for money’ was introduced to ensure that investment products are only approved for sale to retail clients if their costs and charges are justified and proportionate in view of their performance. Firms will have to base this assessment on agreed standards – e.g. supervisory benchmarks under the IDD – and will be obliged to identify and quantify all costs and charges borne by investors related to the investment products they advise.
 
Meanwhile, the launch of the EU ‘Omnibus Simplification Packages’ in February 2025 heralded a major regulatory drive to boost European competitiveness by slashing bureaucracy and reporting requirements. Simplification and ‘cutting red tape’ have become the new buzzwords, whereas compliance and granular regulatory constraints have taken a back seat, leaving the RIS package in somewhat of a countercurrent. After a long radio silence, the Council and Parliament announced their agreement on the updated framework last 18 December 2025, stating that technical work would continue to finalise the legal texts ‘early in 2026’. Following their official publication, Member States will normally have 2 years to transpose the new rules. At the time of writing, however, no further update has been provided. Faced with prolonged legal uncertainty and potentially massive implementation costs, the financial services sector remains anxious to assess the RIS’ real-life impact, and whether it will require a complete overhaul of their business models. 
 
Check out the RIS dedicated webpage.
 
If you have any questions or need advice, contact Lydian’s insurance expert, Partner Sandra Lodewijckx.