ESAs Announce Outcome of Review of Key Information Document for PRIIPs
ESAs informed EC, via a letter, that the draft regulatory technical standards that amend the technical rules on key information document (KID) for packaged retail and insurance-based investment products (PRIIPs) were not adopted by all three ESA Boards. Therefore, ESAs are not in a position to formally submit the technical standards to EC. The letter details the outcome of a review conducted by ESAs on KID for PRIIPs. The review intended to address the regulatory issues that have been identified since the implementation of the KID—particularly regarding the information on performance and costs—and to allow the appropriate application of the KID by undertakings for collective investment in transferable securities (UCITS).
As part of this review, a draft final report had been submitted to the Boards of Supervisors of the three ESAs in June, for their approval. The report contained balanced and proportionate final proposals that would allow ESAs to meet their key policy objectives, while remaining in line with the PRIIPs level 1 framework (Regulation 1286/2014). The draft technical standards were adopted at the EBA and ESMA Boards on the basis of qualified majority voting. At the EIOPA Board, the standards did not receive the support of a qualified majority, although a large number of members agreed with the draft technical standards. The EIOPA Board members that did not support the technical standards generally argued that a partial revision of the PRIIPs Regulation is not appropriate at this stage, prior to a comprehensive review of Regulation 1286/2014 as envisaged in Article 33 of the Regulation. A number of Board members also indicated that, for investment funds, they would prefer the past performance graph from the UCITS key investor information document to be included in the PRIIPs KID, rather than in a separate publication. Given that the draft technical standards were not adopted by the three ESA Boards, ESAs are not in a position to formally submit the technical standards to EC. For transparency, the draft final report has been included as an Annex to the letter.
Related Links
Keywords: Europe, EU, Banking, Insurance, Securities, KID, PRIIPs, UCITS, Regulatory Technical Standards, EC, ESAs
Related Articles
PRA Consults on Implementation of Certain Provisions of CRD5
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).
EIOPA Report Identifies Key Financial Stability Risks for Insurers
EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.
EBA Publishes Risk Dashboard for First Quarter of 2020
EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.
EBA Issues Updates on Stress Test Exercise for Banks in EU
EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.
PRA Proposes Guidance Related to Matching Adjustment under Solvency II
PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.
MAS Issues Guidance on Dividend Distributions by Banks
MAS published a statement guidance on dividend distribution by banks.
APRA Updates Guidance on Capital Management for Banks
APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.
FSB Report Reviews Macro-Prudential Framework and Tools in Germany
FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.
EBA Urges Firms to Finalize Preparations for End of Brexit Transition
EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.
SRB on Operational Continuity in Resolution and FMI Contingency Plans
SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.
