European regulators are targeting retail investor costs with new action to examine the fees and costs charged by fund managers.
The European Securities and Markets Authority (ESMA) announced the launch of the Europe-wide supervisory effort, along with the region’s local regulators, focusing on the supervision of retail costs and fees.
The regulators said the initiative will assess the industry’s compliance with the rules regarding investment costs and the obligation to not charge investors “undue” costs.
ESMA said the effort will also examine firms that employ “efficient portfolio management” techniques to assess whether they adhere to the regulatory requirements for collective investments.
Addressing the costs and performance of retail investment products is a strategic priority for European regulators in 2021.
“Throughout 2021, [local regulators] will share knowledge and experiences through ESMA to ensure supervisory convergence in how they supervise cost-related issues, and ultimately enhance the protection of investors,” ESMA said in a release.
“Ensuring greater convergence in the supervision of costs is an integral part of ESMA’s broader efforts on the cost of retail investment products and is key to improving investors’ confidence in financial markets and reducing costs associated with obtaining financial products.”