RIS

The Retail Investment Strategy (RIS) — reached political agreement between the European Parliament and Council in December 2025. This ended more than two years of tough negotiations on level one regulatory changes in MiFID, IDD, UCITS, AIFMD, Solvency II and PRIIPs (Omnibus package), that began with the Commission’s original proposal in May 2023.

The RIS omnibus package still needs to be officially endorsed by the European Parliament and complete legal / linguistic review, before being formally adopted and published in the Official Journal (not expected before Q4 2026). Most of the changes are due to apply 30 months after Official Journal publication (approximately Q2 2029), although few changes will apply 20 days after Official Journal publication.

During 2026 the process of level two regulation is on the ESAs agenda and numerous consultations are expected.

This guide covers the main regulatory changes, and what firms need to be specifically aware of in the coming months and years. It also delivers our best guess on timeframes (as of August 2026) as well as market effects and expected implementation efforts/uncertainty.

Key changes from RIS include:

• the introduction of new “value for money” requirements for manufacturers and distributors of investment products which will require firms to set up processes that will include peer group comparison of cost and performance (MiFID, AIFMD and the UCITS Directive) and comparison against supervisory benchmarks (IDD);

• enhanced costs and charges requirements, including the introduction of a more standardised methodology and templates for costs and charges disclosures to retail investors

• changes to inducement rules and introduction of an inducement tests

• changes to rules governing suitability and appropriateness assessments

• new requirements in respect of marketing communications and practices, including a framework for the use of finfluencers

• enhanced oversight of EU firms providing cross-border services.

• changes to client categorisation requirements.

• changes to the PRIIPs Regulation, including the addition of a new “Product at a glance” section within the PRIIPs KID and the potential for layering of information provided in the PRIIPs KID.

General comments by Capital Market Partners:

• Generally, the RIS package has been gradually watered down from an implementation and market impact point of view during political negotiations in the spirit of European competitiveness. However, CMP still sees some areas that might be costly and where the technical standards delegated to the ESAs might have significant impact on the final implementation efforts and costs. In other words, there are areas of great implementation cost and cost uncertainty.

• CMP will advise clients to monitor the content of the technical standards with regards to the peer grouping exercise within the VfM framework as well at Danish interpretations use of expected returns. With regards to market impact and implementation efforts the final level two technical standards on peer grouping will largely define the task ahead for firms and the effect with regards to product governance processes.

• The same goes for the cost and charges regime that will unfortunately only grow more complex for firms to comply with and clients to understand. The industry was largely left to take own implementation decisions with regards to ex-ante and ex-post cost and charges implementation during MiFID II since no technical standards were commissioned. Streamlining the parameters and assumptions in the cost calculation engines to comply with common new standards will give rise to calibration costs of uncertain and likely diverging proportions across firms and jurisdictions. Costs will cover both changes in IT systems and engagement with clients.

• The PRIIPs document will be changed significantly both with regards to content and methodology. Both will give rise to implementation costs for manufacturers directly or indirectly through third party service providers. However, changes are also foreseen fo distributers with regards to making online comparison tools available even though this is most likely primarily a configuration exercise since distributers already make product. information available on product sites and web banks.

• The legislative changes to clients facing processes will likely mostly result in changes that will further complicate the client journey. However, a joker in this regard might be the industry uptake on the suitability lite regime and the possibility to combine this regime with the ASK. In combination with Danish regulatory changes on ASK (i.e. increasing the limit to 500.000 DKK ) this might give rise to a boost in retail engagement. Another joker would be the more flexible regime for opting up to the professional client category which might move more retail clients to this less strict investor protection regime.

 

Diving into the key changes

Even though RIS alters several regulations in many ways there are some areas that should be top of mind by firms covered regulated by MiFID, IDD, UCITS, AIFMD and PRIIPs.

 

Value for money

RIS introduces new requirements within the MiFID II and IDD product governance frameworks for manufacturers and distributers of PRIIPs and IBIPs to undertake “value for money” (VfM) assessments. VfM processes will require firms to identify and quantify costs and charges, performance and other benefits of products for retail clients, with firms assessing whether costs and charges are “justified and proportionate”. As long as relevant products are being distributed, firms will need to regularly review whether they offer value for money to clients.

Under MiFID:

• Manufacturers will be required, as part of the VfM process, to undertake a peergroup analysis to compare costs and performance of their products against “a representative number” of products with similar characteristics which are marketed in the same Member State(s) and (where feasible and proportionate) in other Member States. For derivatives, the peer group analysis will only need to compare product costs and charges (including inducements).

• Manufacturers will need to pass on information about the VfM assessment (alongside other information on their product approval processes) to distributors. Distributors will also be subject to VfM requirements, including a requirement to undertake a peer 1 MiFID uses the term “clients” while IDD uses the term “customers”. We will generally use the term “clients” in the text. We expect this data to be included in the EMT files governed by FinDatEx. group analysis. However, a distributor may rely on a manufacturer’s VfM assessment where this includes all costs of distribution.

• When selecting peer groups, the product characteristics that should be considered include recommended holding period, risk, investment strategy and objectives, distribution strategy, target market, defined coupon / yield, sustainability features, active / passive management, as well as “limited additional criteria” where these are “necessary to ensure that the peer group comparison is accurate, reliable and objective”.

• The Commission is empowered to deliver delegated acts on the criteria for peer grouping, as well as on the peer group assessment itself (i.e. whether the product represents an “outlier”). The Commission may also (amongst other things) provide further detail on the criteria for the VfM assessment where there are no or only limited comparable products available to create a peer group.

• For outliers (i.e. products at a “significant distance” from the average cost / performance of the peer group to the detriment of the retail client), firms would need to undertake additional testing to substantiate that the product offers VfM (for example, where a product includes special features that are not reflected across the whole peer group, but which are relevant to particular investors’ needs and objectives), or take actions ensure the product does deliver VfM (i.e.. lowering costs).

Where VfM cannot be guaranteed, firms should not manufacture or distribute the product in question.

• Importantly, the final RIS rules state that, even where products are not “outliers” compared to the peer group, this does not automatically imply that such products offer VfM to clients. This suggests that firms should consider, as part of the VfM process, whether there are any other considerations (not included in the peer group comparison) which could impact the outcome of the VfM assessment. It is not clear what these “other considerations” might be, and whether and to what extent firms should consider tailoring their VfM assessment to particular clients. Firms should be mindful of local implementation of the VfM requirements, and ESMA / EIOPA guidance on supervisory expectations. In Denmark special attention should go to how the expected returns by the counsel of return expectations should be included in the new setup alongside the peer grouping of historical returns and costs.

• Firms will need to keep detailed records of VfM assessments including peer group selection and comparison, as well as details of any VfM assessment for “outlier” products and related remedial actions. The rules require firms’ management bodies to oversee and be accountable for the product approval process, including the VfM assessment and any remedial action taken in respect of “outlier” products. Firms will need to keep relevant records for five years (or seven on request by their NCA) and will need to provide these records to their NCAs on request.

• NCAs will have powers to review firms’ VfM processes and to step in to request actions to ensure that products offer VfM, or to prevent products that do not meet the VfM requirements from being offered.

• Product governance requirements in general (including the new VfM requirements) are not applied for any products marketed and distributed exclusively to eligible counterparties nor for bonds with no embedded derivative other than a make-whole clause.

• MiFID distributors will be required to provide certain data on the cost of distribution of relevant products to ESMA (ESMA due to produce RTS on these reporting requirements).

Under IDD (ex. Insurance Based Investment Products: “IBIPs”):

• Instead of firms identifying relevant peer groupings for the VfM assessment, EIOPA is tasked with developing EU supervisory benchmarks to help NCAs identify IBIPs which have an increased risk of poor VfM, and which would merit additional checks on compliance with the VfM requirements. These supervisory benchmarks will display a range of cost and performance data of IBIPs in product clusters, with the methodology for these benchmarks, but not the benchmarks themselves, being published. EU supervisory benchmarks are going to evolve over time, and EIOPA has been asked to prioritise benchmarks for the most common IBIPs.

• Where IBIPs are exclusively distributed in a single Member State and there are national specificities, the relevant NCA may put in place national benchmarks for a period of four years following entry into force of the RIS changes. Member States will be able to continue to use any national benchmarks developed within that four-year period once that period has passed.

• RIS makes special provision for multi option products (MOPs).

• The Commission is empowered to produce delegated acts on the criteria for the VfM assessment for IBIPs. Peer grouping (under MiFID) and the creation of supervisory benchmarks (under IDD) are intended to be created based on data from existing disclosure and reporting requirements, such as PRIIPs KIDs, ESMA statistics on costs and performance of retail products, or data made available to firms on a nondiscretionary basis by professional associations.

Under UCITS/AIFMD:

• AIFMs and UCITS management companies will be required to put in place “undue costs” processes. This will require firms to identify and analyse direct or indirect costs charged to investment funds or unit holders / shareholders (and thus ultimately borne by investors).

• Costs may be considered “due costs” if they comply with pre-contractual documents, are necessary to the functioning of the AIFs / UCITS, and are borne fairly by investors. Investors will need to be compensated for undue costs charged above a pre-defined minimum limit.

• For UCITS and AIFs made available to retail investors, the undue costs assessment will need to include a VfM assessment, which is closely aligned with the VfM assessment under MiFID, weighing costs against performance and other benefits for retail investors, including the use of peer group comparisons comparing EU-funds with similar characteristics. The Commission may produce delegated acts on the minimum requirements for the undue costs and VfM processes for AIFs / UCITS.

Supervisors:

• To ensure supervisory convergence on VfM, ESMA and EIOPA will deliver guidance on supervisory practices. ESMA and EIOPA will also use supervisory convergence powers to support convergent supervision of relevant disclosures, peer group selection and VfM assessments.

• Five years after the VfM requirements start to apply, Member States will need to provide information on their implementation to ESMA / EIOPA, and the ESAs are due to submit a report to the Commission one year later. The Commission will then assess the effective implementation of the VfM framework and its impact on retail clients, with a Commission report due seven years after the VfM requirements started to apply.

Costs and charges

• Costs and charges disclosures to retail clients will need to be provided in a standardised format (to be set out in ESMA/EIOPA RTS). The RTS will specify relevant terminology, calculation methods and explanations to be included in these disclosures. Since methodology was not defined when MIFID cost and charges was introduced firms may likely have to revise methodology.

• Costs and charges disclosures will need to include third party inducements, as well as distribution costs and any costs of advice charged by the firm or by third parties to whom clients have been directed (as in the Danish market today).

• Disclosures will need to show aggregated costs (in monetary terms and as a percentage calculated to the product’s maturity date). On request by retail clients, firms will need to provide an itemised breakdown of costs.

• Firms providing services to retail clients /customers will also need to provide an annual statement of costs (and other) information unless the retail client / customer has accessed the relevant information on an online system provided by the firm, the firm has evidence that the retail client has accessed the information in the last 12 months, and the client has consented to not receiving the annual statement.

• Third party inducements will need to be shown separately in costs and charges disclosures (as today in the Danish market), with firms required to show (for retail clients) the cumulative effect of inducements (new requirement).

• Firms that provide safekeeping services alongside investment services and distributors of IBIPs will also need to produce an annual statement to retail clients / customers with an overview of the products held by the client, costs, charges and inducements, payments made in respect of the products and the products’ performance.

• Member States will be able to goldplate the costs and charges & inducement disclosure requirements under MiFID II in “exceptional cases”.

 

Inducements

Requirements regarding inducements are being revised to better prevent conflicts of interest and enhance protections for retail investors.

• The final RIS text does not include an inducement ban where firms provide execution only services as had been proposed by the Commission originally.

• However, the RIS text allows Member States to goldplate the MiFID inducement rules in “exceptional cases” by imposing a complete ban on inducements, or by restricting the payment / receipt of inducements to certain products or services.

• In addition, where firms offer execution only services to retail clients digitally using a “filtering tool”, firms will need to allow retail clients to easily identify products for which the firm does not pay or receive inducements.

• More generally, there will be some criteria (in both MiFID II and IDD) which inducements will need to meet in order to be considered not to impair firms’ duty to act in the best interests of their clients / customers – the new so called “inducement test”. The criteria are a mix of existing level 2/3 requirements with minor changes, as well as a few new ones; that the inducement does not contain a form of variable or contingent threshold linked to volume or value of sales, and that the relevant inducement provides a tangible benefit to the client (in the latter case, under MiFID, the inducement also needs to be justified by the provision of services). The requirement to deliver tangible benefits to the client largely resembles the existing requirements regarding quality enhancing services in MiFID.

• The Commission is empowered to publish delegated acts on certain aspects of the new inducement tests, which could give rise to concerns that more prescriptive requirements could come through Level 2 measures.

• Firms will be required to keep an internal list of inducements, alongside details of the inducement test performed in respect of these.

• Minor non-monetary benefits are excluded from the above inducement tests. But the new rules specify that these will need to be of a value below EUR100 p.a. per third party or otherwise of a “scale and nature” so as to not impair compliance with the clients’ best interest requirements.

• The package also includes a Commission review of the effects of inducements on retail clients five years after entry into force of the RIS package which may include proposals for legislative change on inducements and a further ban might once again be proposed.

 

Client and advisory processes

Best interest requirements are being refined to require firms to recommend the most costefficient product, unless the firm can demonstrate that a more costly product may provide “objectively greater benefits” to clients.

Suitability and appropriateness:

• As part of the suitability assessment, financial advisers will be required “where possible” to consider clients’ need for portfolio diversification. Firms will need to request information of clients’ existing portfolio of financial and non-financial assets for these purposes, although (if clients do not wish to provide information on their portfolio held with other firms) firms may base the portfolio diversification assessment on the information available to them.

• The new rules will allow both independent or non independent investment advisers to advise clients on well-diversified, non-complex and cost efficient products without having to apply a full suitability assessment of relevant clients’ knowledge and experience or existing portfolios (the so-called “suitability lite” approach). The Commission can produce delegated acts in this regard, including on criteria and conditions products need to meet to benefit from the “suitability lite” approach.

• Where a firm makes a negative appropriateness assessment, or is unable to make

an appropriateness assessment, firms will (in addition to the current risk warning to the client) only be able to proceed with the relevant transaction following an expressed request from the client.

Competency requirements:

• With a view to enhancing the quality of advice, the RIS increases the knowledge and competency requirements for financial advisers under MiFID and relevant intermediaries under IDD. This will include advisers having to evidence their expertise, and minimum annual training of 15 hours through certificates or comparable proof. Member States can specify their own criteria for assessing knowledge.

Risk warnings:

• For “particularly risky products”, firms will be required to display risk warnings including in marketing communications.

• ESMA and EIOPA will produce RTS on how to identify these risky products, taking account of specificities of particular products (such as market, credit or liquidity risks and the product or underlying asset).

• NCAs will be able to impose the use of relevant risk warnings for specific products ESMA / EIOPA will have powers to issue a recommendation that NCAs impose such risk warnings.

Digital service provision and marketing

• The RIS package introduces enhanced powers for NCAs to step in where products and services are being marketed online targeting clients in breach of relevant authorisation requirements. In this context, the legislation explicitly sets a framework for the use of finfluencers for marketing purposes by investment firms.

• There will be enhanced requirements on marketing communications and practices, including the use of third parties that receive payment or non-monetary benefits from firms. The new requirements elaborate on the “fair, clear and not misleading” concept, as well as requiring firms to present essential characteristics of products and services and the associated risks and benefits in a balanced manner.

• Firms will also need to put in place a policy on marketing communications and practices, alongside related governance and controls and reporting to the management body.

• The use of finfluencers in the marketing of products and services is specifically mentioned, with specific requirements to enter into a written agreement setting out the nature and scope of activity to be carried out by a finfluencer on behalf of a firm.

• There are new record keeping and reporting requirements in respect of marketing activities and communications accessible to retail clients, including details on the use of third parties in marketing activities. MiFID firms will need to keep relevant records for five years (or seven years on request by an NCA), and firms subject to IDD will need to keep records for seven years.

• Member States will be able to goldplate the MiFID requirements in respect of marketing communications and practices in “exceptional cases”.

• NCAs will be given new powers, including powers to suspend marketing communications and practices which are reasonably believed to be in breach of the new marketing requirements.

• The Commission may publish delegated acts on the essential characteristics of products / services and the conditions marketing communications and practices need to meet.

 

Cross-border service provision

• The RIS is introducing enhanced cooperation processes between NCAs, for example where host Member States have concerns about the supervision of firms providing services in their jurisdictions by those firms’ home Member States.

• Under MiFID, ESMA will be empowered to set up collaboration platforms on request from two or more NCAs. Under IDD, EIOPA will be able to do so at its own initiative or on request by one or more NCA.

• For MiFID firms providing services to 50 or more clients, or insurance intermediaries providing services to 500 or more customers, in each case on a cross-border basis, firms will need to report detailed information including on the scale of these crossborder services, number of clients in host Member States and marketing communications used, with an RTS setting out further detail on this. NCAs will share this information with ESMA / EIOPA who will make the information available to other NCAs and use it to produce reports on cross-border services.

Client categorization

The RIS package contains several changes to the MiFID client categorisation requirements. In particular amending the criteria to opt-up to professional clients, so that (amongst other changes):

§ the criteria for the assessment of a client’s experience, knowledge and expertise will take account of relevant experience of individuals outside the financial services sector and of relevant training and education;

§ acknowledge that changes to the required transaction frequency can still adequately capture ongoing experience;

§ amend transaction size thresholds so that it may reflect what constitutes a transaction of a significant size in the relevant market, as

assessed by the firm (which, for derivatives, may depend on the underlying asset class, index or reference price); and

§ for the assessment of a client’s wealth will see the threshold for the client’s portfolio lowered to EUR 250,000.

• introducing professional client criteria for clients that are legal entities based on the entities’ balance sheet total, net turnover and own funds.

• providing that managers / directors of regulated firms and funds should be regarded as professional clients where they are directly involved in the relevant entity’s investment activity, meaning that they possess the relevant knowledge and experience; and

• providing that certain employees of AIFMs who are professionally involved in the management or marketing of AIFs or the distribution of the funds should be regarded as professional clients for the specific AIFs they manage or market.

Other key changes

• The RIS requires ESMA (where necessary based on consumer and industry testing) to produce guidelines on electronic disclosures to clients, including on how disclosures should be presented and safeguards ensuring that electronic disclosures are accessible and can be navigated on different devices.

• Requirements to notify clients of a 10% loss in value of the client’s portfolio have been deleted in MiFID, as this may lead to panic selling, which may not be in the relevant client’s best interests over the longer term.

• The legislation contains an express request for Member States to promote measures to increase the financial literacy and education of retail clients. Firms engaged in financial literacy and education will need to remain mindful of not straying into financial advice / marketing communications.

 

PRIIPs

Scope:

• The definition of packaged retail investment products (PRIPs) is being amended so that products where the repayment amount may fluctuate only due to a make-whole clause will be out of scope (Existing ESMA statement is moved to level one). Unlike most of the other changes to the PRIIPs Regulation, this change is set to apply 20 days after the amending regulation is published in the Official Journal.

• A new exclusion is introduced for pension products consisting of immediate annuities with no accumulation phase, on the basis that such products are not considered investment products and therefore are not meant to fall within the scope of the PRIIPs Regulation.

PRIIPs KID content and availability:

• “Product at a glance” section: PRIIPs KIDs will need to contain a new “Product at a glance” section summarising certain key information about the product, including the type of PRIIP, summary risk indicator, total costs of the PRIIP, recommended holding period, and whether the PRIIP offers insurance benefits.

• Sustainability information: The RIS notes that the sustainability profile of a PRIIP must be included in the key information document. However, given the ongoing SFDR review, the final RIS package does not include specific proposals for sustainability disclosures or a new ESG section.

• Page limit: Despite the addition of the new “Product at a glance” section and other specific information requirements, the three-page limit for KIDs has been retained which might pose challenges for some products.

• Information on performance: The RIS amends the requirements in respect of performance information to be included in the PRIIPs KID to allow for greater flexibility. This includes allowing the KID to include information on past performance (where this is meaningful) and forward-looking performance scenarios based on realistic data and plausible assumptions.

• Multi option products (MOPs): For MOPs, where it is not possible to provide information on each investment option in a single concise document, the KID must at least contain a generic description of underlying investment options, and the cost of the PRIIP.

• Retail investors will need to be given access to comparison tools to compare the different investment options, including costs of these options and (where feasible) total costs of the PRIIP, with RTS to follow on the creation of comparison tools.

• Electronic format: PRIIPs KIDs will need to be provided in an electronic, machinereadable format, which will support the use of the ESAP in due course.

• Layering of key information: The final RIS text envisages greater flexibility for providing the KID electronically, including the potential to “layer” information to avoid visual overload for retail clients, provided that the full KID may always be accessed in electronic or paper form.

• Updating the PRIIPs KID: KIDs will need to be kept up-to-date for any PRIIPs that are still made available or open to new subscriptions or any PRIIPs which can be purchased on the secondary market.

• The Commission has been tasked with assessing, by the end of 2030, the feasibility of putting in place an EU-wide product comparison tool once PRIIPs KIDs have been included in the European Single Access Point (ESAP) and may put forward legislative proposals to facilitate an EU-wide tool.

Timing and next steps

The RIS texts still need to undergo legal and linguistic review and will then need to be officially adopted by the European Parliament and Council before being published in the Official Journal, not expected before Q4 2026. The RIS Directive (amending MiFID II, IDD, AIFMD, the UCITS Directive and Solvency II) will enter into force 20 days after Official Journal publication. Member States will then have two years to implement the relevant changes in national legislation, and the revised requirements will apply to firms 6 months later (i.e. two and a half years after entry into force, so around Q2 2029). The amendments to the PRIIPs Regulation scope will also enter into force 20 days after Official Journal publication, not expected before Q4 2026. The changes to the scoping of PRIIPs will apply from that date. Most other changes will apply two and a half years later (around Q2 2029). The RIS package envisages a significant number of delegated act and technical standards and ESMA / EIOPA guidance to be developed in the run up to the new requirements go live. Firms will be advised to follow these developments as they are likely to have significant impact on implementation.