Extension of UCITS exemption for PRIIPs validated by European Commission

Context

On 3 February 2021, the European Supervisory Authorities (ESAs) published the outcome of their discussions on the packaged retail investment and insurance products (PRIIPs) regulation and announced they reached a consensus on the PRIIPs amendments. There were no content changes to the draft RTS as published in June 2020. The new RTS bring significant changes to performance scenarios, costs computations and disclosures.

The text was sent to the European Commission for approval, with the industry highly hopeful for an extension of the crucial 1 January 2022 deadline for the new requirements.

What is new?

In a letter to the European Parliament and the Council on 10 May 2021, Commissioner Mairead McGuinness stated that the European Commission will move the end of the exemption for UCITS funds and the application of the new RTS requirements from 1 January 2022 to 1 July 2022.

Also, the European Commission has stated that they want to avoid the publishing of both PRIIPS KID and UCITS KIID for retail investors of UCITS funds after this deadline.
 

Next steps

The European Commission will introduce a “quick-fix” technical adaption to the PRIIPs and UCITS level 1 legislations to avoid duplication of pre-contractual disclosures to retail investors through the PRIIPs KID and UCITS KIID. This will be introduced at the same time as the RTS formal adoption.

After it is adopted, the package will be discussed at the European Parliament and the Council.

What is in it for my institution?

When adopted by the European Parliament and the Council, the new RTS will be an important milestone for producers of PRIIPs KID, as this document will pave the way for the new format that is required by July 2022.

This affects PRIIPs KIID production for all concerned stakeholders, asset managers, banking institutions and insurance companies. Compliance with the new RTS will require existing KID production systems to be reviewed, analyzed for gaps, modified and tested before the go-live date.
 

How can Deloitte help?

At Deloitte, our UCITS and PRIIPs KI(I)Ds analytics and assembly services are designed to help you smoothly cope with the upcoming regulation change and the large volume of documents. Our specialist team is also ready to assist clients to efficiently transit to the new KIDs. We can offer this on an advisory basis, as a support to your internal project team, or through our KID outsourced solutions and the provision of fully-fledged KID and analytics services.

Please contact us if you would like to discuss and plan how to best manage the impact of this PRIIPs review.

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