HM Treasury Outlines Approach to Amend PRIIPs Regulation in UK
HM Treasury published a policy statement on its proposed approach to bringing forward amendments to the onshore Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation to avoid consumer harm and provide the appropriate certainty to industry once the UK ceases to be bound by the EU regime. The proposed amendments target the most pressing concerns with the PRIIPs regulation and are intended to ensure that UK retail investors are provided with more appropriate PRIIPs disclosures. In the longer term, HM Treasury intends to conduct a more wholesale review of the disclosure regime for UK retail investors. HM Treasury plans to bring forward amendments to the onshore PRIIPs regulation to improve the functioning of the PRIIPs regime in the UK when parliamentary time allows.
The PRIIPs regulation sets the requirements for a standardized disclosure document, known as the Key Information Document (KID), that must be provided to retail investors when they purchase particular packaged investment products, known as PRIIPs. The regulation is supplemented by regulatory technical standards laid down in the EU Commission Delegated Regulation 2017/653 (laying out regulatory technical standards) that sets out further detail on the requirements under PRIIPs. The proposed amendments will enable FCA to make supplementary provisions and amendments to these regulatory technical standards with a view to avoiding consumer harm, addressing distortions of competition, and providing the appropriate certainty to industry. HM Treasury intends to make the following changes to the onshore PRIIPs regulation.
- An amendment enabling FCA to clarify the scope of the PRIIPs regulation through the rules. HM Treasury proposes an amendment, which delegates a power to FCA to clarify the scope of PRIIPs through rules. This would enable FCA to address existing, and potentially future, ambiguities in relation to certain types of investment products. The definition of a PRIIP will remain unchanged.
- An amendment to replace "performance scenario" with "appropriate information on performance" in the PRIIPs Regulation. HM Treasury proposes an amendment to replace the term "performance scenario" with "appropriate information on performance" in the PRIIPs regulation. FCA will then be able to amend the regulatory technical standards to clarify what information on performance should be provided in the KID.
- An amendment enabling HM Treasury to further extend the exemption in place for Undertakings for the Collective Investment in Transferable Securities (UCITS) funds. HM Treasury proposes an amendment that delegates power to the Treasury to further extend the exemption for UCITS for up to a maximum of five years. This will enable HM Treasury to consider the most appropriate timing for transition of UCITS funds into any domestic successor; this may result from the planned review of the UK framework for investment product disclosure and bring forward a Statutory Instrument to amend the exemption date in the PRIIPs regulation, as necessary.
Related Links
Keywords: Europe, UK, Banking, Securities, Insurance, PRIIPs Regulation, PRIIPs, KID, Disclosures, Regulatory Technical Standards, FCA, HM Treasury
Previous Article
EIOPA Report Identifies Key Financial Stability Risks for InsurersRelated Articles
US Agencies Finalize Interim Final Rules Issued Amid Pandemic
US Agencies (FDIC, FED, and OCC) finalized two rules, which are either identical or substantially similar to the interim final rules in effect and issued earlier this year.
EIOPA Consults on Use of Risk Mitigation Techniques Under Solvency II
EIOPA is consulting on a supervisory statement on the use of risk mitigation techniques by insurance and reinsurance undertakings.
APRA Proposes to Increase Transparency of Banking Data
APRA announced that it is resuming consultation on the confidentiality of data submitted to APRA by the authorized deposit-taking institutions.
BoE and FCA Encourage Switch to SONIA in Interest Rate Swap Markets
BoE and FCA are supporting and encouraging liquidity providers in the sterling swaps market to adopt new quoting conventions for inter-dealer trading based on SONIA, instead of LIBOR, from October 27, 2020.
Bundesbank Updates Supporting Information for SHS Reporting
Deutsche Bundesbank published special schema files for securities holdings statistics (SHS), along with a document on the XML format description.
EC Deems UK Framework for CCPs Temporarily Equivalent to EMIR Rules
EC adopted a decision determining, for a limited period of time, that the regulatory framework applicable to central counterparties, or CCPs, in the UK and Northern Ireland is equivalent to the requirements laid down in the European Market Infrastructure Regulation (EMIR or Regulation 648/2012).
ESMA to Recognize Three Central Counterparties from UK
ESMA announced that it will recognize three central counterparties (CCPs) established in the UK as third-country CCPs, from January 01, 2021.
PRA Publishes Version 02.04 of PRA110 Liquidity Metric Monitor Tool
PRA published Version 02.04 of the PRA110 liquidity metric monitoring tool (PRA110 LMM tool).
LEI ROC Confirmed as Governance Body for OTC Derivatives Identifiers
FSB confirmed the Regulatory Oversight Committee (ROC) of the Global Legal Entity Identifier System (GLEIS) as the International Governance Body for the globally harmonized identifiers used to track over-the-counter (OTC) derivatives transactions, with effect from October 01, 2020.
FCA Consults on Regulation of International Firms in UK
FCA is consulting on its approach to the authorization and supervision of international firms operating in UK.
