Financial services businesses are looking to technology and external consultants in order to cope with the tight turnaround on the regulation for packaged retail and insurance-based investment products (PRIIPs), according to a KNEIP pan-European regulatory survey.
The survey included compliance and regulatory executives in the asset management, banking and insurance sectors, and found that 85 percent are concerned about the time they have to prepare the key information documents (KIDs) required under PRIIPs.
The final regulatory standards for the PRIIPS legislation and the KIDs is due to be finalised in September, however the deadline for implementation is 31 December, giving firms less than four months to produce the mandatory documents required.
Almost half, 46 percent, of financial services respondents said they are considering turning to external consultants in order to cope with the requirements, while 43 percent said they are looking at new technologies. Only 15 percent of respondents said they are planning on hiring new staff to ease the implementation.
On top of this, 43 percent said they are concerned about the contents of the KIDs altogether, as they could potentially be misleading to retail investors.
Mario Mantrisi, senior adviser to the CEO at KNEIP, commented: “Financial services companies have a tendency to kick their heels while waiting for a piece of regulation to be signed off. This leads to firms being under enormous time pressure to produce the necessary collateral to comply with regulations, such as PRIIPs, in order to meet the implementation deadlines.”
He added: “Due to cost and time pressures, companies have increasingly moved away from hiring permanent staff to implement new regulations. External consultants and technology are seen as a more cost-effective solutions.”
Mantrisi went on to say, however: “Increased transparency and more accurate crystal-balling of investment products will help retail investors and improve the reputation of the financial services industry as a whole.”
The survey was conducted through a series of KNEIP cross-industry working groups in London, Luxembourg, Frankfurt and Paris, including 60 financial services firms.
