On Thursday 28 June, the European fund and asset management industry body issued a press release stressing the worrying shortcomings of the rules governing the Key Information Documents (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs). This follows the publication of its Evidence Paper that found that the new methodology for calculating transaction costs imposed by the PRIIPs regulation often produces positive “costs” and that the new KID deprives investors of a crucial past performance information.
BETTER FINANCE wholeheartedly agrees with these findings and warns against the use of future performance scenarios that will not help investors make investment decisions, and even mislead them, as they will be provided with excessively optimistic performance scenarios.
BETTER FINANCE goes even further in its criticism of the PRIIPs Regulation and reiterates its major concerns with the PRIIPs KID in term of investor protection. In this respect BETTER FINANCE requests that the Regulation at the very least comply with MIFID II rules on performance disclosure, meaning that such future performance information must be accompanied by a prominent warning stating that such forecasts are not reliable indicators of future performance!
Read the full press release here.