The 9th of November the EC announced PRIIPs implementation date to be moved to the 1st of January 2018. The delay will give the industry some time to adapt to the changes. The legislators will have time to fix the issues expressed by ECON, the parliament, and the industry.
The Commissioners were pleased to see the regulation delayed:
"PRIIPS is an important piece of legislation that will provide consumers with accessible and transparent information on complex investment products. To ensure legal certainty and a smooth implementation for consumers we are today proposing to extend the date of application by one year, the extension should be limited to one year only and we are glad that the European Parliament and the Council are supportive of the view that the substance of the rules should not be re-opened." - said Valdis Dombrovskis Vice-President for the Euro and Social Dialogue, also in charge of Financial Stability, Financial Services, and the Capital Markets Union.
"The objective of PRIIPs is to increase protection of retail investors and restore consumer trust in the financial services industry. Furthermore, greater transparency and harmonisation will benefit the internal market in financial services by creating a level playing field among different products and distribution channels. However, we have taken note of the concerns of the European Parliament and the Council and are therefore proposing to postpone the date of application." said Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness.
The European Commission will work closely with the European Supervisory Authorities (ESAs), to amend the issues of the RTS. Both organisations aim to have an updated draft in the first half of 2017.
In a discussion hosted by the Greens and the European Free Alliance at the European Parliament on the 19th of October, Ugo Bassi (DG FISMA) mentioned a 6/9/12 month legislation delay, and a draft of new Regulatory Technical Standards (RTS).
The idea behind the legislation is to provide enable clear comparability between Investment Options. Ugo Bassi expressed hopes of bridging the above concerns with the idea and having a new, improved draft ready “By February”.
On November 9th the European Commission will discuss the exact delay time, and whether the level 1 legislation should come into force within the current deadline the 31/12/2016.
PRIIPsHub’s CEO, Carsten Mahler, has been featured in the Actuarial Post with an article entitled “Uncertainty surrounding PRIIPs and the imminent challenges”.
Even though the association is in strong favour for a unified KID format, in the EU, JAC is “very concerned that the PRIIPs Regulation is due to apply as of 31 December 2016 and there is still no agreed form of Level 2 RTS”. And considers 3 potential options in regards to the PRIIPs legislation date:
Option a) The rejected RTS to be applied from 31 December 2016 but will be very swiftly revised, agreed politically without any meaningful consultation
Option b) The PRIIPs Regulation to be applied from 31 December 2016 with no RTS, and the RTS revised and amended with prudence, in good time.
Option c) Application of the PRIIPs Regulation to be delayed in order to allow sufficient time for the RTS to be settled. Allowing the industry to have sufficient time for review, comment, and act upon its contents.
The Association considers Option C to be the best course of action, being 2 and a half months away from the supposed deadline, giving different arguments why Option A and Option B would not be viable.
JAC concludes that the only reasonable option that would allow effective implementation of the PRIIPs Regulation, is for the application to be delayed by one year to the 3 January 2018. This would allow the level 2 RTS to be clarified, agreed, and amended while also allowing markets sufficient time to implement technical solutions and systems required to comply.