ESA publishes final recommendations on KIDs for PRIIPS
08 February 2019 London
Image: Shutterstock
The European Supervisory Authorities (ESAs) have published their final recommendations, following a consultation on targeted amendments to the Delegated Regulation, covering the rules for the Key Information Document (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs).
The PRIIPs regulation defines the main rules and principles for KIDs. The KID for PRIIPs is a mandatory, information document to be provided to consumers before purchasing a PRIIP.
PRIIPs include funds, structured products, unit-linked and with-profits life insurance contracts, and structured deposits.
Having taken into account the feedback received, and considering the implications of a possible decision by the European co-legislators to defer the application of the KID by certain types of investment funds beyond 2020, the ESAs decided to not propose targeted amendments at this stage.
They also agreed to initiate a more comprehensive revision of the PRIIPs Delegated Regulation to be undertaken in the course of 2019, including to launch a consultation on the draft Regulatory Technical Standards.
The decision comes after the ESAs wrote a letter to the European Commission expressing their concerns regarding the possibility of duplicating information requirements for investment funds from 1 January 2020 and the importance of legislative changes to avoid such a situation, including a targeted review of the PRIIPs Delegated Regulation.
After this letter was initially written, the ESAs published a consultation paper on 8 November 2018 proposing targeted amendments that would allow the KID to be applied to all types of investment funds and to address key issues that have arisen since the implementation of the KID.
In parallel with the ESA’s work, the European co-legislators also initiated discussions on legislative changes relating to the application of the KID by certain investment funds and the timing of a review of PRIIPs.
When publishing the consultation paper, ESAs stated that they would take into account the latest information regarding these political discussions when deciding upon their final proposals.
The PRIIPs regulation defines the main rules and principles for KIDs. The KID for PRIIPs is a mandatory, information document to be provided to consumers before purchasing a PRIIP.
PRIIPs include funds, structured products, unit-linked and with-profits life insurance contracts, and structured deposits.
Having taken into account the feedback received, and considering the implications of a possible decision by the European co-legislators to defer the application of the KID by certain types of investment funds beyond 2020, the ESAs decided to not propose targeted amendments at this stage.
They also agreed to initiate a more comprehensive revision of the PRIIPs Delegated Regulation to be undertaken in the course of 2019, including to launch a consultation on the draft Regulatory Technical Standards.
The decision comes after the ESAs wrote a letter to the European Commission expressing their concerns regarding the possibility of duplicating information requirements for investment funds from 1 January 2020 and the importance of legislative changes to avoid such a situation, including a targeted review of the PRIIPs Delegated Regulation.
After this letter was initially written, the ESAs published a consultation paper on 8 November 2018 proposing targeted amendments that would allow the KID to be applied to all types of investment funds and to address key issues that have arisen since the implementation of the KID.
In parallel with the ESA’s work, the European co-legislators also initiated discussions on legislative changes relating to the application of the KID by certain investment funds and the timing of a review of PRIIPs.
When publishing the consultation paper, ESAs stated that they would take into account the latest information regarding these political discussions when deciding upon their final proposals.
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