On 14 September 2016, the European Parliament voted to reject
the PRIIPs Regulatory Technical Standards (the
"RTS") which were endorsed by the
Commission on 30 June 2016. This follows a vote by the European
Parliament's Economic and Monetary Committee
("ECON") on 1 September 2016 to support
a motion to reject the RTS.
The RTS, which supplement the EU regulation on key information
documents for packaged retail and insurance-based investment
products (the "PRIIPs KID Regulation"),
specify the presentation, content and underlying methodology of the
key investor document ("KID") that will
have to be provided to retail investors when they buy certain
In rejecting the RTS, the European Parliament raised concerns
over certain aspects of the KID including, amongst others, that the
proposed methodology for the calculation of future performance
scenarios contains flaws, that there is a lack of clarity relating
to the treatment of multi-option products, and that a lack of
detailed guidance in the RTS on the 'comprehension alert'
creates a serious risk of inconsistent implementation of this
element in the KID across the single market.
In its resolution of 14 September 2016, the European Parliament
calls on the Commission to submit new RTS which take account of the
European Parliament's concerns and also calls on the Commission
to consider a proposal postponing the application date of the
PRIIPs KID Regulation to ensure a smooth implementation of the
requirements set out in both the PRIIPs KID Regulation and the RTS,
and avoid the application of the PRIIPs KID Regulation without the
RTS being in force in advance.
As it stands, the PRIIPs KID Regulation application date of 31
December 2016 remains unchanged. However, after yesterday's
vote, a delay is becoming more likely.
We will continue to monitor any developments and provide updates
as information becomes available.
In the meantime, as the PRIIPs KID Regulation date of 31
December 2016 currently remains unchanged, we recommend that all
PRIIPs manufacturers and those persons advising on or selling
PRIIPs continue with their preparation to ensure that they are in a
position to comply with the provisions of the PRIIPs KID Regulation
by 31 December 2016.
To assist clients in developing their PRIIPs KID, Dillon Eustace
has created a PRIIPs KIID template which follows the prescribed
template in the RTS.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Since the PRIIPs Regulation was published on 9 December 2014, the concept of a multi-option product has been one of the most discussed topics among the manufacturers of insurance-based investment products.
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