European Supervisory Authorities (ESAs) said they are not in a position to formally submit draft regulatory technical standards (RTS) to the European Commission to amend the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs) Delegated Regulation after it did not receive the support of a qualified majority.
The review follows the launch of the consultation paper which was published on 16 October last year on the draft RTS to amend PRIIPs Delegated Regulation.
A draft final report following the public consultation was submitted to the three boards of supervisors of the ESAs for their approval in June.
The draft RTS was adopted at the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) boards on the basis of qualified majority voting.
However, at the European Insurance and Occupational Pensions Authority Board, although a large number of members agreed with the draft RTS, it did not receive the support of a qualified majority.
In a letter to John Berrigan, director general, directorate-general financial stability, services for Financial Stability, Services and Capital Markets Union (FISMA), the ESAs revealed that those board member who did not support the RTS generally argued that a partial revision of the PRIIPs Delegated Regulation is not appropriate at this stage, prior to a comprehensive review of Regulation (EU) No 1286/2014 as envisaged in Article 33 of the Regulation.
It also found that a number of board members indicated that for investment funds, they would prefer the past performance graph from the UCITS key investor information document to be included in the PRIIPs KID itself, rather than in a separate publication.
The ESAs said they would like to use the letter to “reiterate this point” and explained that they shared the same views.
According to the ESAs, the report contained “balanced and proportionate final proposals, which would allow the ESAs to meet their main policy objectives, while remaining in line with the PRIIPs level 1 framework”.
The aims of the review were to address the main regulatory issues that have been
identified since the implementation of the key information document (KID), in particular regarding the information on performance and costs, and to allow the appropriate application of the KID by UCITS.
The letter concluded: “In any case, for transparency purposes, we have included the draft Final Report as an Annex to this letter. As always, the ESAs remain at your disposal to provide any clarification or discuss the issues further.”
It was signed off by José Manuel Campa, chair of EBA; Gabriel Bernardino, chair of EIOPA; and Steven Maijoor chair of ESMA.
