On the 20th of September, 24 EU member states requested a 12 month delay in the PRIIPs implementation. While all of the countries calling for a delay fully support the regulation and the aims behind PRIIPs in order to protect retail investors, some of the stumbling blocks that derailed the Level 2 regulatory technical standards (RTS) and the resulting lack of clarity on how to proceed with the implementation were cited as one of the major reasons for requesting the delay.
The countries that are a part of the objection are Germany, the United Kingdom, France, Austria, Croatia, Sweden, Ireland, Slovenia, Lithuania, Cyprus, Romania, Finland, Denmark, Portugal, the Netherlands, Malta, Estonia, Hungary, Greece, Belgium, Bulgaria, Latvia, Czech Republic and Slovakia.
We are currently waiting for determinations in regards to when the final decision will be made.
Today, MEPs passed a resolution calling for changes to the level 2 Regulatory Technical Standards (RTS) for PRIIPs, with 602 votes for, 4 votes against and with 12 voters choosing to sit out.
The European Parliament has now confirmed that the RTS is inadequate, with a focus on the future performance scenarios being problematic for investors.
Therefore the next step will be to draft a new RTS. However there was no delay in the original deadline of 31 December 2016.
The European Commission has adopted a delegated act supplementing the PRIIPS regulation in the form of the Regulatory Technical Standards for the production of the Key Investor Document or KID for PRIIPS.
Read the Regulatory Technical Standards
Above and beyond the production aspects of the KID for PRIIPs manufactures, UCITs funds, which do not need to produce the KID until 2019, will also be immediately affected by the Directive. This is because the PRIIPs who wrap their products will need to collect extensive amounts of data to produce their KIDs and in the case of Multi Option Products (MOPs) they will need to have easy access to the UCITs KIID documents. The consequence is that UCITs funds who might have thought that their deadline was in 2019 are quickly realizing that the still have a large an important obligation to meet this year.
At the same time, certain "UCITS only" groups could be tempted to anticipate the deadline of 2019 and produce from 2018 onwards the new KID for their own customers in order to avoid any confusion due to the co-existence of the KIDs and KIID's. They could in this way benefit from the first mover's advantage.