The Joint Committee of the European Supervisory Authorities launched a consultation on amendments to the Key Information Document for Packaged Retail and Insurance-based Investment Products (PRIIPs).
Since January 1, 2018, the EU PRIIPs Regulation has required providers of PRIIPs to prepare and publish a stand-alone, standardized Key Information Document (KID) for their products. Even though Undertakings for the Collective Investment in Transferable Securities (UCITS) are exempt from the PRIIPs regulation until December 31, 2019, they are required to have a Key Investor Information Document (KIID) in place. Until now UCITS have had their own KIID. So, if no changes are made to EU legislation, UCITS would be subject to duplicate information requirements as of 1 January 2020. To address this situation, the ESAs are proposing to get rid of the UCITS exemption by applying the PRIIPs Regulatory Technical Standards to them.
According to EFAMA, the PRIIPs KID rules so far are not appropriately designed to provide investors with accurate and clear information and that therefore consumers should continue benefiting from the well-functioning UCITS KIID. EFAMA adds that phasing out the UCITS exemptions without any assessment of the PRIIPs KID having taken place is “legally questionable” and is not achievable in a timely and responsible manner.
• See BETTER FINANCE’s position on the issue: THE KEY INFORMATION DOCUMENT WILL PROVIDE INVESTORS WITH MISLEADING AND NON-COMPARABLE FUTURE PROJECTIONS. To read more, visit JD Supra and Funds Europe.