The original Packaged Retail Investment and Insurance Products (PRIIPS) regulation (“level 1”) entered into force in December 2014. Initially intended to apply from January 2017, it was deferred by one year by the European Commission after the European Parliament rejected the regulatory technical standards (“level 2”) in relation to the Key Information Document (KID).
The PRIIPs KID was envisioned as a long-term replacement for its UCITS predecessor and associated management firms were given an initial 2-year grandfathering period (until Jan 2020) to prepare for the transition.
From the start, the 3-page was not favourably compared to its UCITS KIID predecessor, as it contains significant, additional disclosure of Risk, Performance and Costs & Charges information.
As a result of these difficulties, the Cross-Border legislation package (CBD) published in July 2019 extended the UCITS exemption period until January 2022.
PRIIPs is coming
Earlier this year, the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) delivered the draft Regulatory Technical Standards (RTS level 2) to the European Commission on the 5th of February. At the time of printing this report, the European Commission has yet to confirm the date for which the grandfathering period will finally come to an end, although latest indications seem to suggest another 6 months extension.
Although the 30th June 2022 extension may sound like good news, it means for Asset Managers there will be the need to run another annual revision of the UCITS KIID in Jan/Feb 2022 – in parallel to all the preparations needed in order to be ready to create PRIIPs KIDs by 1st July 2022. Additionally, a new version of the European PRIIPs Template (EPT) is expected, to which Asset Managers will likely need to adapt also.
Download this free guide to preparing for the transition to PRIIPs
Are you ready for PRIIPs? Kneip has produced a guide to help you prepare for the transition. What’s changing when? What should you look out for? And how to prepare today? Download your free copy here.