New PRIIPs RTS published in the EU Official Journal
The European Council has cleared the EU Taxonomy Climate Delegated Act (DA) after the extended scrutiny period ended on Wednesday 9 December. No objections were raised by the Council, leading to its publication in the EU Official Journal.
In 2017, the PRIIPs regulation came into force to provide investors with more transparency on investment products through standardized information on risks, future performance and costs. While the aim of this legislation has not been questioned, some of its provisions have been criticised from the very beginning by consumer representatives and the financial industry. Consequently the European Supervisory Authorities (ESAs) started consultations on changes of the current regulations back in October 2019 . This process reached a preliminary conclusion last year with some regulatory updates:
The European Commission (EC) adopted on 7 September 2021 the revised RTS in regard to the PRIIPs Key Information Document (KID) in all official languages.
On 23 November 2021, the European Parliament voted to adopt two "quick-fixes" for PRIIPs and UCITS regulations:
- The exception for UCITS having to provide a key information document (KID) under the PRIIP Regulation has been extended to 31 December 2022.
- Non-retail funds, investment companies and management companies should continue to provide an UCITS KIID, unless they decide to provide a PRIIPs KID, in which case they do not have to create an UCITS KIID anymore.
The latest update is the publication of the Commission Delegated Regulation (EU) 2021/2268 amending PRIIPs KID RTS in the Official Journal of the European Union on 20 December 2021.
EU Official Journal, L 455 I, 20 December 2021
Impact for asset managers and insurers
The implementation of the PRIIPs KID exemption for UCITS and of the PRIIPs KID reform is scheduled for 1 January 2023. However, the changes required by the new PRIIPs RTS shall be implemented starting from 1 July 2022.
During the transition period, it is not required to publish in parallel both PRIIPs KIDs and UCITS key investor information documents (KIIDs).
Asset managers and insurers need to adapt their production processes to integrate the changes brought by the new PRIIPs RTS, such as implementing a modified methodology for performance scenarios, changes to the calculation of transaction costs, or amendments to look-through requirements.
What next?
From 21 October to 16 December 2021, the ESAs ran a joint call for evidence regarding the PRIIPs Regulation. The ESAs’ technical advice to the European Commission on a review of the key information document (KID) for PRIIPs is planned for early 2022 with an application date of 1 January 2023.
Efficient transition with IDS
IDS PRIIPs Service can help you with this significant transition. We are prepared for an implementation of the required changes to support the new requirements by 1 July 2022. In the coming weeks, we will provide you more detailed insights into the amended PRIIPs RTS.
Curious how we can help? Our experts are eager to support you with the required preparation to ensure a smooth transition.
