Today, Order ECC/2316/2015 of November 4th comes into effect, establishing the obligation to include a risk indicator in financial products, consisting of classifying the product’s risk according to a system of 6 colours. Green signifies a product that is simple and secure, while Red indicates the complexity of the product, which may be difficult to understand and lead to losses. The need of classifying financial products by their risk according to a colour coding system arose from a proposal the Defensor del Pueblo issued in 2012, and reiterated on various occasions. It intends to ensure that, besides other information, citizens that are unfamiliar with the financial sector are made aware by financial entities of the type of product they are acquiring and the potential risk associated with that product. The products and services offered to clients without adequate and sufficient information to evaluate their situation have been many and varied. Citizens came to the institution upon realizing the true nature of the products they had acquired. The Defensor del Pueblo believes that this new risk indication system will help make the market more secure for the consumer.
Related Documentation:
24/04/2014. Press Release – The CNMV will prepare a system to indicate the true risk of financial products, just as the Defensor del Pueblo requested.
21/11/2012. Press Release – The Bank of Spain has accepted the proposal to create a risk indicator for bank products.
