On 12 April 2017, the level 2 measures with regard to the PRIIPS1 Regulation (Regulation (EU) 2014/1286) were published in the Official Journal of the European Union.
These level 2 measures are Regulatory Technical Standards ("RTS") and, as a reminder, the first draft was rejected by the European Parliament in September 2016.
The key changes brought about by the new version of the RTS and its annexes as opposed to the initial version (dated June 2016) are essentially the following:
- Multi-option products ("MOPs"): an option is given to MOPs offering the possibility to invest in a UCITS fund or in another type of fund exempted on the basis of Article 32 of the PRIIPS Regulation to use, at least partly, the information (risks/costs) and methods of calculation provided for the UCITS KIID;
- Comprehension alert: clarification of cases where the insertion of a comprehension alert for the investor is required;
- Performance tests: replacement of the 4th performance test (which was required when the manufacturer believed that the significant risk of loss was not adequately covered by the other scenarios) by a stress scenario to be systematically disclosed.
The RTS will become applicable on 1 January 2018, i.e. on the same date as the PRIIPS Regulation.
Footnote
1. PRIIPs refer to packaged retail investment products and insurance-based investment products as defined in Article 4 of the PRIIPs Regulation.
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