The European Commission has bowed to pressure from the Parliament and Council and agreed to delay the regulation on key information documents (KID) for packaged retail and insurance-based investment products (PRIIPs) by 12 months.
According to the European Commission, the delay has been “proposed exceptionally”, in order to ensure smooth implementation for consumers and to “ensure legal certainty for the sector”.
It follows a recommendation from the European Council, which issued a letter calling for a delay to implementation, in order to “clarify open questions and reach the goals of the PRIIPs Regulation”.
The delay follows the European Parliament’s economic and monetary committee vote in favour of a revision to the regulatory technical standards (RTS) of the KID, citing concerns around the method of creating the document, and the timeframe between publication of the RTS and the proposed PRIIPs implementation date of 31 December. It voted to send proposals for the legislation back to the European Commission for revision.
In a statement on the delay, the commission said: “While the European Commission believes that 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 KIDs already in place.”
“In particular, the RTS will be important in offering consumers the benefit of having KIDs that are more easily comparable and standardised. The delay gives issuers and distributors of PRIIPs products until 1 January 2018 to put the provisions in place.”
The European Fund and Asset Management Association (EFAMA) welcomed the delay. In a statement, the association said: “There is only one reason why we considered a delay absolutely essential, and this is because it is materially impossible and simply unrealistic for product manufacturers and distributors to meet the original 31 December 2016 deadline.”
The statement added that EFAMA remains committed to the PRIIPs project, and that the postponement allows more time for companies to find solutions to the revised RTS.
The European Commission will now work with the the European Systemic Risk Board, the Joint Committee of the European Supervisory Authorities and the National Supervisory Authorities of EU Member States to revise the RTS in accordance with recommendations, while aiming to maintain the “balance previously achieved”.
The European supervisory authorities have six weeks to re-submit the revised standards to the commission. Once accepted, they will be passed to the European Parliament and Council for further assessment.
