On Thursday 15 July, the European Commission proposed to extend the transitional arrangement provided for in the Regulation on Packaged Retail and Insurance-based Investment Products (‘PRIIPs’) until 30 June 2022 .
The Regulation requires PRIIPs originators to provide retail investors with a key information document (KID) on each of the products they offer.
However, it provides for a transitional arrangement whereby management companies, investment companies and persons advising on, or selling, units of UCITS or non-UCITS are temporarily exempted from the requirement to provide a KID to retail investors.
This arrangement currently applies until 31 December 2021 and the Commission is proposing to extend it until 30 June 2022 “in order to allow time to implement these changes and reduce legal uncertainty”.
The changes proposed by the Commission, through a regulation, are based on the draft technical regulatory standards jointly submitted by the European Supervisory Authorities (ESAs) on 3 February (see EUROPE 12651/26), which also amend Delegated Regulation 2017/653.
These technical standards include new methods for calculating appropriate performance scenarios and a revision of the presentation of these scenarios to ensure that the information provided to retail investors does not create false expectations of possible returns.
The Commission is also proposing amendments to Directive 2009/65/EC to ensure that from 1 July 2022 investors do not receive two pre-contractual information documents for the same UCITS.
“CFA Institute calls on the EU authorities to prioritise the long-overdue PRIIPs Regulation review and to extend the UCITS funds’ exemption until its review is completed. The suggested six-month extension is insufficient to address the issues raised by most industry stakeholders and will lead to continuing confusion for the end investor”, reacted Josina Kamerling, Head of Regulatory Outreach EMEA at CFA Institute.
See the proposed regulation: https://bit.ly/36Hx9JM (Original version in French by Marion Fontana)