Decoding EU Disclosure Regulation on Retail Investment Products

Organised by

• Department of Law

The European Union has adopted many disclosure laws with the aim of providing retail investors with financial and sustainability-related information from those who manufacture, offer, issue and distribute investment products. Despite this considerable amount of EU legislation, the literature has yet to analyse the horizontal relationship between these EU disclosure laws in detail, leaving many foundational and often deeply complex issues underexplored. The present work thus seeks to contribute to this question through a detailed analysis of the EU disclosure framework on retail investment products. Its principal objective is to systematically evaluate the framework’s legal design using leximetrics (i.e. the quantification and measurement of laws) based on a newly developed Retail Investor Disclosure Design Assessment (RIDDA) scheme. The RIDDA-scheme scores each disclosure law based on thirty-seven carefully selected design features. The assessment covers all disclosure laws in force on 1 December 2023, which concerns 54 laws embedded in more than 80 legal acts across securities, company, insurance and consumer law. In support of the leximetric analysis, the historical evolution of the disclosure framework is discussed, starting with the late 1950s until 1 May 2024. A repository has been constructed for this part, which has recorded key data on 567 legislative interventions throughout this period, including the legal act responsible for the legal change and its temporal dimensions. The research concludes by identifying multiple problems with the design of the disclosure framework, in particular the lack of a holistic regulatory philosophy that systematically incorporates technological advancements, and aligning compliance benchmarks with behavioural insights. The findings of this thesis open several avenues for future academic research, including the ongoing work on codifying European securities law, comparative research with other jurisdictions and the intersection of artificial intelligence and disclosure regulation.