A product should be regarded as not being simple and difficult to understand especially if it displays one of the following characteristics: a. it invests in underlying assets that are not commonly invested in by retail investors; b. it uses a number of different mechanisms to calculate the final return of the investment, creating a greater risk of misunderstanding on the part of the retail investor; c. the investment's pay-off takes advantage of retail investor's behavioural biases, such as a teaser rate followed by a much higher floating conditional rate, or an iterative formula‘.

Also, Galileo has a much higher rate of return than any other comparable infrastructural investment (for example, the Trans European Networks have in average a rate of return of around 8%, whereby Galileo's rate of return is estimated to be around 49%).

The comparison referred to in paragraph 2 point (e) ii) shall be designed to help the investor to understand how taking greater risk impacts the rewards of the investment product, and the risk-free benchmark, such as that of a savings account, shall be set in way that is comprehensible for retail investors and not misleading to them.

The return on capital allowed ex ante for investment into NGA networks should strike a balance between on the one hand providing adequate incentives for undertakings to invest (implying a sufficiently high rate of return) and promoting allocative efficiency, sustainable competition and maximum consumer benefits on the other (implying a rate of return that is not excessive).

C. whereas the extremely unequal distribution of earnings, globalisation, liberalisation and deregulation of financial markets paved the way for financial innovations (derivatives, hedge funds, private equity, securitisation, structured investment vehicles etc.), which in turn contributed to excessive and excessively pro-cyclical leverage, short-termist behaviour, the imposition of untenable demands for high rates of return on production and service enterprises (‘shareholder-value orientation’) and also fast and widespread global contagion of risks,

18. While welcoming the broadly positive assessment by the Court of Auditors of the Commission's management of the ECSC budget in the financial year 1999, as well as the Commission's undertaking on the provision of information concerning the average rate of yield on liquid assets in the ECSC's annual report from the financial year 2000 onwards, stresses the necessity for the Commission to ensure maximum transparency in the disclosure of data affecting the value of the ECSC's assets, particularly in the approach to the expiry of the EC ...[+++]SC Treaty and the creation of the Research Fund for Coal and Steel.