Parliament rejects PS, BE and Livre projects that wanted more protection for investors

Parliament today rejected three bills presented by the Socialist Party (PS), Left Bloc (BE) and Livre (L) that called for rules to protect non-professional and unqualified investors.

The bills were presented following a petition from the Association of Victims of Bonds and Structured Products (ALOPE), which had already been submitted to the Assembly of the Republic in 2020.

The PS project, which adopted rules to protect non-professional investors in the marketing of financial products, was approved in the first instance, with votes against from the CDS-PP and the PSD (Social Democratic Party), but was rejected when the Portuguese Communist Party (PCP) and Chega (CH) announced that they would abstain after all.

The BE project, which established protection for savers and non-qualified investors, was rejected by votes against from CDS-PP, Iniciativa Liberal (IL) and PSD and abstentions from CH and PS.

The Livre text, which recommended strengthening the protection of non-professional investors, was voted against by CH, CDS and PSD, as well as abstentions by IL and PCP.

When presenting the projects, Socialist MP Carlos Pereira argued that Portugal "cannot be a country of complex, often even creative, financial products and at the same time be a kind of hell for investors – small investors and non-professional investors."

BE coordinator Mariana Mortágua pointed out that there are financial products that are confusing and there is a “level of misinformation and inequality in access to information between those who invest and those who sell the products.”

Free Party representative Patrícia Gonçalves insisted that the State has a duty to ensure that “everyone plays by the same rules” and advocated for increased financial literacy.

"We also advocate for the training of specialized mediators who truly know how to help, who are prepared to deal with financial conflicts, and who respond to people seriously."

Filipe Sousa, from Juntos Pelo Povo (JPP), considered it urgent to guarantee greater protection for retail investors, through the creation of an investor ombudsman and mandatory reporting in financial conflicts.

Recognizing that this is a relevant topic, Liberal MP Mário Amorim Lopes considered it important to differentiate between fraud and a lack of information about a financial product, giving as an example the commercial paper of Banco Espírito Santo, which was poorly publicized.

“This lack of information can be resolved precisely with financial literacy,” he argued, displaying a four-page information sheet for a term deposit.

The leader of the CDS-PP party, Paulo Núncio, considered that this is an issue "that requires technical rigor, solid legal knowledge and legislative responsibility," since guaranteeing investor security is "defending a free capital market."

From the Chega bench, deputy João Ribeiro insisted on the need for financial literacy in schools “and even among the adult population”, having pointed out that the State failed its citizens as a regulator (…) of the market.

Social Democrat Pedro Coelho pointed out that the petitioners have two intervention plans: prevention and monitoring, and how to react when the institutions' legal obligations are not met.

According to this deputy, “none of them presents technical or financial justification, some establish prohibitions (…), creating more obstacles, and all are misaligned (…) with the European framework”.