Investors get a color-coded risk map

Small investors felt vulnerable after confirming that preferential stock shares were far riskier than anticipated when the bought them. Most complaints are aimed at bank managers on grounds that they deceived investors. Also, the CNMV was called out for not ensuring transparency in the sale.

Elvira Rodríguez, the CNMV's president, thought it was a priority to address this situation since she took over. Rodríguez made good on her word, and the CNMV has launched a coherent system that works for all investor types, and the banks should use it to classify how risky their products are. Based on the efficient rules used by power companies, which most consumers know about, a five-color code from light green to red indicate a financial product's inherent risk. Also, other symbols represent a product's complexity and liquidity level. These elements will give investors better information before they plop down their savings. With a new system like this, people will have a hard time arguing that they didn't know what they were buying.

The new system will also influence how these products are advertised. Although it comes a little late and sanctions are still in the works, this is a good measure from the CNMV that brings more transparency to investing in Spain and shows that the regulator is committed to building a strong market for trading.