ESAs Statement on Application of Scope of PRIIPs Regulation to Bonds
ESAs issued a supervisory statement to promote consistent application, by national competent authorities, of the scope of the regulation for packaged retail and insurance-based investment products (PRIIPs Regulation) to bond markets. The supervisory statement seeks to mitigate the risk of divergent application, by national competent authorities, for determining the type of bonds for which it is necessary to draw up a Key Information Document (KID). The Annex to the statement provides guidance on the practical application of the provisions determining the scope of the PRIIPs Regulation.
In the view of ESAs, uncertainty over application of the PRIIPs Regulation to bonds has led to negative consequences for functioning of bond markets and for access to these markets by retail investors. There are also risks of divergent applications, by national competent authorities, with negative consequences for achieving uniform levels of retail investor protection and a level playing field among product manufacturers and distributors within the EU. To promote a consistent application of the scope of the PRIIPs Regulation to bond markets, ESAs recommend that national competent authorities apply the guidance set out in the Annex to the statement when supervising compliance with the requirements in Chapter I of the PRIIPs Regulation. To fully address the risk of divergent applications by national competent authorities, ESAs recommend that during the upcoming review of the PRIIPs Regulation, the co-legislators introduce amendments to the Regulation to more precisely specify which financial instruments fall within the scope of the regulation. The overall objective of this statement is to achieve a high, effective, and consistent level of regulation and national supervision while promoting a level playing field and the protection of retail investors.
Related Links
Keywords: Europe, EU, Insurance, Banking, Securities, PRIIPs, PRIIPs Regulation, Bonds, KID, Supervisory Statement, ESAs
Previous Article
EBA Single Rulebook Q&A: Second Update for October 2018Related Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.