ESAs consult on proposed changes to the key information document for PRIIPs

The European Supervisory Authorities -ESAs (EBA-EIOPA-ESMA) have issued on 8 November 2018 a consultation paper 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 ESAs anticipated in a letter to the European Commission (on 1 October 2018) their intention to make proposals to support legislative changes to avoid the possibility of duplicating information requirements for investment funds from 1 January 2020 and to tackle key issues that have arisen since the implementation of the KID.

Article 32 of PRIIPs Regulation (No 1286/2014) provides a temporary exemption for management and investment companies and persons advising on, or selling, UCITS from the obligation to produce and provide a PRIIPs KID. For such funds, a Key Investor Information (KII) Document is currently provided to investors in accordance with UCITS Directive. As things stand, the exemption from the PRIIPs KID obligations ceases to apply on 31 December 2019: this means that from 1 January 2020, UCITS and relevant non-UCITS funds will be required to prepare a PRIIPs KID. In the absence of legislative changes, UCITS and relevant non-UCITS funds would be required to draw up and publish both a PRIIPs KID and UCITS KII.

To this extent, the consultation paper considers possible changes in view of the exemption in Article 32 of the PRIIPs Regulation being due to expire and the possible use of the PRIIPs KID by UCITS and relevant non-UCITS funds from 1 January 2020.

The consultation paper also includes proposals to change the approach for performance scenarios, as well as a description of several other options that were identified, and presents potential amendments on a limited number of other specific issues based on the information gathered by the ESAs since the implementation of the KID.

The deadline for comments on the consultation is 6 December 2018. The ESAs will also publish a final report including feedback on the consultation at this time. It is intended that the finalised amendments would be applicable from 1 January 2020.

Download here the consultation paper