ESAs proposed to amend existing rules underpinning the Key Information Document (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs). The proposed amendments relate to the empowerment in Article 8(5) of the PRIIPs Regulation about the presentation and content of the KID, including methodologies for the calculation and presentation of risks, rewards, and costs within the document. The intention is to address issues that have been identified by stakeholders and supervisors since the implementation of the KID in 2018 and make changes to allow the rules to be applied to investment funds that are expected to prepare a KID from January 01, 2022 onward. The deadline for submission of feedback is January 13, 2020.
The consultation paper proposes changes in the following topic areas:
- Illustrations of what the retail investor might receive in return from their investment (performance scenarios)
- Information on what are the costs of the investment
- Specific issues for different types of investment funds
- Specific issues for PRIIPs offering a range of options for investment (so-called "Multi-Option Products")
As part of the review of KID for PRIIPS, EC, in cooperation with the ESAs, is undertaking a consumer testing exercise to assess the effectiveness of different presentations of performance scenarios. The results are expected in the first quarter of 2020. When deciding on the final proposals, ESAs will take into account the feedback from respondents to this consultation, as well as the results of the consumer testing exercise. This consultation paper follows a previous ESAs consultation on the PRIIPs KID in November 2018. The November 2018 consultation paper proposed more targeted amendments to the PRIIPs Delegated Regulation. Taking into account the feedback to that consultation, in February 2019, ESAs decided to defer their review and work on more substantive revisions during 2019.
Comment Due Date: January 13, 2020
Keywords: Europe, EU, Insurance, Securities, KID, PRIIPs, Performance Scenarios, EC, ESAs
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