Both organizations have always been supportive of the KID (Key Information Document) for PRIIPs but could see flaws in the Regulatory Technical Standards (RTS). These crucial issues were the basis of a joint letter sent to the European Parliament, the European Commission, the European Supervisory Authorities and the Presidency of the Council of the EU & Financial Attachés.
“There are two crucial issues that need to be addressed: allowing the disclosure of past performance, and fixing the misleading disclosure of costs and fees, and in particular the calculation methodology of transaction costs. The joint letter explains why both topics need to be solved” - Peter de Proft, Chairman of EFAMA
“Past performances of an investment product are an extremely valuable piece of factual information for investors in their investment decision, if only for investors to know whether the product has made any money or not. It is very difficult to understand why investors should be deprived of such information” - Guillaume Prache, Director General of Better Finance
PRIIPsHub, together with Veneziano & Partners, has been featured in an article published in The Hedge Fund Journal. The article expands on the following headlines:
· What is a PRIIP and who is concerned with the initiative
· Impact on the UCITS KIID
· Criticism of the RTS expressed by EFAMA
· Concerns about the final draft of the RTS and how the RTSs have been rejected
· Does this mean that PRIIPs legislation will be delayed?
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.