Amendments to the PRIIPs KID - Final report

News

PRIIPs: Final Report following joint consultation paper concerning amendments to the PRIIPs KID

18 February 2019

Regulatory News Alert

European Supervisory Authorities (ESAs) followed up a consultation paper released on 8 November 2018 on targeted amendments to the “PRIIPs Delegated Regulation” concerning the Key Information Document (KID) for packaged retail and insurance-based investment products (PRIIPs). The report sets out the next steps following the analysis of the received feedback.

As a reminder, PRIIPs regulation has been applicable since 1 January 2018, with an extension for UCITS and relevant non-UCITS funds until 31 December 2021 (pending ratification by the European Commission and Council).

The Final Report is composed in the following way:

  • Consultation paper background
  • Description of the political developments since the publication of the consultation paper
  • Summary of the feedback provided on the consultation paper and the ESAs’ response to this feedback at this stage, including the issuance of a Supervisory Statement on performance scenarios
  • Intended next steps regarding the work to review the PRIIPs Delegated Regulation

The overall feedback from the 98 responses to the consultation paper shows that while some of the proposals were considered to have merits, stakeholders are overall not in favor of the proposed targeted amendments. Generally, the respondents considered the amendments to have “limited benefit”, “not addressing the fundamental issues” and “not seen to outweigh the expected implementation and compliance costs”.

Due to this, as well as their working assumption about UCITS exemption, the ESAs are of the view that it is not appropriate to submit substantive amendments to the PRIIPs Delegated Regulation at this stage.

However, as a temporary response to the asset management industry’s concerns about KID performance scenarios misleading the retail investor, ESAs recommend PRIIPs manufacturers adding a prescribed and highlighted statement within the KID warning the investor of the limitations of the figures shown.

ESAs’ next steps include proposing new RTS by the end of 2019, consumer testing of the existing and proposed approached in collaboration with the European Commission and launching a further public consultation during 2019. The ESAs intend to broaden the scope of the review beyond the areas identified in the consultation paper to include performance scenarios, potential inclusion of UCITS in scope, the transaction costs methodology and reduction in yield (RIY) approach, PRIIPs offering a range of options for investment, differentiation between different types of PRIIPs, as well as other specific changes.

The ESAs will also continue their work to monitor implementation of the current PRIIPs rules and to publish level 3 measures, such as Q&As, where appropriate.

PDF - 135kb

Contacts

Xavier Zaegel
Partner – Capital Markets/Financial
Risk Leader
Tel : +352 45145 2748
xzaegel@deloitte.lu

Sylvain Crépin
Partner – Capital Markets/Financial Risk
Tel : +352 45145 4054
screpin@deloitte.lu

Lou Kiesch
Partner – Regulatory Consulting
Leader
Tel : +352 45145 2456
lkiesch@deloitte.lu

François-Kim Hugé
Partner – Regulatory Strategy
Tel : +352 45145 2483
fkhuge@deloitte.lu

Thierry Flamand
Partner – Insurance Leader
Tel : +352 45145 4920
tflamand@deloitte.lu

Florence Buron
Director – Financial Industry Solutions
Tel : +352 45145 2704
fburon@deloitte.lu

Simon Ramos
Partner – IM Advisory & Consulting 
Leader
Tel : +352 45145 2702
siramos@deloitte.lu

Pascal Martino
Partner – Banking & Digital Leader
Tel : +352 45145 2119
pamartino@deloitte.lu

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