European securities regulators are proposing new guidelines for dealing in complex debt and deposit products.
The European Securities and Markets Authority (ESMA) issued a consultation paper Tuesday that sets out draft guidelines for firms dealing in complex debt instruments and structured deposits.
ESMA says that the proposals are intended to enhance investor protection by clarifying which types of financial instruments and structured deposits can be sold; and, ensuring compliance with rules in this area.
The paper sets out draft guidelines for assessing bonds, other forms of securitized debt, and money market instruments that use a structure that makes it difficult for a client to understand the risk involved; and, for structured deposits where it’s difficult for clients to understand the risks, and the cost of exiting the product before term.
The consultation is open until June 15, and the ESMA expects to publish final guidelines in the fourth quarter of 2015.