Most Read Contributor in Luxembourg, February 2017
The European Parliament (EP), in its plenary last Wednesday,
voted in favour of its ECON Committee's1 'Motion
for a Resolution.' In other words, the EP rejected the
regulatory technical standards (RTS) of the PRIIPs
Regulation,2 following the advice of the ECON Committee
in doing so. The RTS were meant to further define the presentation
and content of the PRIIPs Key Information Document (KID).
The EP's reason for rejecting the RTS is that they believe
the European Commission (EC) has not taken into consideration the
EP's concerns on several points of the RTS (the flaws in the
methodology for the calculation of future performance scenarios and
the approach on multi-option products, for example).
Besides rejecting certain aspects of the RTS content, the EP has
also requested the EC to consider a delay in the application of the
PRIIPs Regulation itself, since the legislative body is of the
opinion that level 1 should be implemented at the same time as the
RTS to avoid uncertainty in the industry's
implementation—uncertainty that would threaten 28 different
implementations of the same regulation. In addition, the European
Supervisory Authorities (ESAs) are currently preparing the third
level of the regulatory framework, the guidelines or
questions-and-answers document (Q&As), aimed at providing
further guidance for those implementing the PRIIPs Regulation.
At present, the question posed by the industry is: but what
happens next? On this topic, Insurance Europe (the European
insurance federation) has helped shed some light on the challenging
approval process of the RTS and the debated delay of the PRIIPs
According to Insurance Europe, the EC will now need to call on
the ESAs to redraft the RTS. Once the ESAs have the new RTS ready,
they will send them to the EC, which will have to carry out an
internal consultation procedure before adopting the new RTS. The EP
and Council will then begin a scrutiny period which can be
undertaken following one of the timelines below:
2 months with the possibility to request an additional month
3 months with the possibility to request an additional 3 months
if the EC makes changes to the version of the RTS submitted by the
If, following the timelines above, the amended RTS are not
available on 31 December 2016, two scenarios will be possible:
the PRIIPs Regulation will have to be implemented without RTS,
making it nearly impossible to be applied in a coherent and
efficient manner across Europe and across sectors; or
the implementation date of the PRIIPs Regulation will have to
be extended in order for the RTS process to happen in a normal
fashion. In this case, the EC would have to submit a proposal to
delay the application. This amendment would be adopted following an
accelerated ordinary legislative procedure.
But what about level 3? The publication of guidelines or
Q&As is independent from the two texts mentioned above, since
they are published by the ESAs unilaterally without any input from
the EP, the EC, or the Council. It is, however, unlikely that the
ESAs would issue these guidelines before there is full clarity on
the new RTS, so as to ensure that the guidelines are aligned to new
RTS. The EC and the ESAs' priority is now to provide new
information to the industry as soon as possible.
1.European Parliament's Committee on Economic and
Monetary Affairs (ECON)
2.Regulation (EU) No 1286/2014 of the European Parliament
and of the Council of 26 November 2014 on key information documents
for packaged retail and insurance-based investment products
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As the banking industry continues to be shaped by technological and regulatory forces, we’ve gathered our European Central Bank (ECB) experts to hold a conference about this changing landscape. KPMG’s ECB desk from Frankfurt will join our Luxembourg banking partners to unpack the latest news from the ECB, including regulations that will affect the future of banking.
We would be very pleased if you could attend this event, which will be held at our Luxembourg headquarters in Kirchberg on 30 March. The talk will begin at 5:00pm and last until 6:00pm, at which point the evening will be turned over to a networking session with drinks.
Please let us know if you are able to attend by using the registration button above (by 27 March, if possible).
We look forward to seeing you there!
Here in Luxembourg, LPEA are holding an event which will offer new initiatives by bringing General Partners (GPs) and Limited Partners (LPs) together to examine and speak on the industry from the “360” perspective, leaving no stone unturned. We are a sponsor of the event, as well as having a speaker present. David Capocci, Partner and Head of Alternative Investments will be offering his own insight on the industry nowadays.
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.
Despite the notable uncertainty concerning the United Kingdom and Gibraltar's future trading relationship with the European Union, there are a number of upcoming developments which the Gibraltar insurance industry and its stakeholders should be monitoring.
Karen Jenner, of FiscalReps, speaks to Captive Review about the hurdles surrounding premium tax compliance for insurers and captives domiciled in Guernsey.
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