On Thursday 1 September, the committee on economic and monetary affairs of the European Parliament decided by an overwhelming majority to issue a formal objection to the draft implementing measures detailing the methodology and content of the KID key pre-contractual information document that retail investors may use to compare certain financial products.
"There is a very strong majority in favour of rejecting the delegated act. And the possibility of having the 'Priips' regulation without the implementing measures was also rejected", said the chair of the parliamentary committee, Roberto Gualtieri, following the vote. Fifty-five MEPs voted in favour of rejecting the implementing measures, there were no votes against and three MEPs abstained.
The European Parliament may be called upon to adopt this objection in mid-September at its plenary session. But between now and then, negotiation meetings between the political groups and then between the MEPs and the Commission as well as the European supervisory bodies will also take place, aiming to make changes to the texts on the table that take account of the MEPs' concerns. The aim is still to work as quickly as possible to have satisfactory implementing measures that can be applied as soon as the regulation in question (1286/2014) enters into force on 1 January 2017. The regulation itself will not be amended. "Whatever happens, the groups are prepared to play the game", the rapporteur on this dossier, Pervenche Berès, who voted in favour of the objection, told EUROPE. The European Parliament has until the end of September to take position.
The MEPs are asking the Commission to change and flesh out the proposed texts on a number of points. They are calling for the removal of the provisions on the past performances of a retail financial product. Sven Giegold (Greens/EFA, Germany) has criticised the European Securities and Markets Authority (ESMA) for failing to react to the "concerns" voiced regarding the data on the past performances of certain financial products, which may lead to confusion.
The European Commission is also called upon to clarify the conditions under which the KID document must contain an indication that an individual is preparing to invest in a potentially risky product, which it did not do in its draft from June (see EUROPE 11584). Furthermore, the MEPs adopted an amendment by the GUE/NGL Group rejecting the arguments of the insurance industry on the inclusion of certain costs in the KID document.
The European Commission representative called for the 'Priips' regulation and its implementing measures to enter into force within the timeframes laid down. However, he added that the regulation was self-standing and could enter into force even if its implementing measures were not ready. In the opposite corner, the director of the European Insurance and Occupational Pensions Authority (EIOPA), Gabriel Bernardino, said that such a scenario would bring with it issues of "legal uncertainty" and pointed out that it is the responsibility of the supervisors to guarantee a consistent application of the rules.
The 'Priips' regulation covers a broad range of retail financial investment products, not including non-life insurance products and life insurance products providing for a premium to be paid in the event of death or physical incapacity (see EUROPE 11052). (Original version in French by Mathieu Bion)