PRIIPs implementation pushed by 12 months.
November 15, 2016
Following a debate, The European Commission (EC) has confirmed the date for its PRIIPs regulations will be pushed to January 2018.
The Packaged Retail and Insurance-based Investment Products (PRIIPs) legislation was due to come into force on 31 December 2016.
Early indicators were there: in September the European Parliament (EP) rejected the regulatory technical standards (RTS) governing PRIIPs Key Information Documents (KIDs).
With the College of Commissioners voting to delay the implementation, the Commission has said the European Supervisory Authorities who control the RTS redraft now have 6 weeks to finish their amendments. The Commission expects the revised PRIIPs framework to be implemented during the first half of 2017.
“This one-year extension is being proposed exceptionally in the interest of ensuring a smooth implementation for European consumers and to ensure legal certainty for the sector. While the European Commission believes the PRIIPs regulation is sufficiently clear as well as directly applicable on its own, its objectives would be better served by having the RTS on Key Information Documents already in place.” stated the Commission.
Concerns were previously being voiced over the requirement for PRIIPs KIDs to include 3 future performance scenarios, with some industry figures giving concern that this could lead to investors being misled by over-inflated future looking performance figures.
The EP’s Committee on Economic and Monetary Affairs had argued in August that this framework may not provide information which is “accurate, fair, clear, and not misleading”.
In early 2016, several asset management groups had criticised the decision to remove past performance figures in key information documents.