ESAs Recommendations on Changes to Key Information Document for PRIIPs
ESAs published the final recommendations on targeted amendments to the Delegated Regulation on rules for the Key Information Document (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs). The final recommendations follow a consultation that took place from November to December 2018. The final report summarizes the feedback received on this consultation and the ESAs’ response to this feedback, including the issuance of a supervisory statement on performance scenarios. The paper also explains the next steps on the work to review the PRIIPs Delegated Regulation this year.
Having considered the feedback received and the implications of a possible decision by the European Co-legislators to defer the application of the KID by certain types of investment funds beyond 2020, ESAs decided the following:
- To not propose the targeted amendments at this stage
- To initiate a more comprehensive revision of the PRIIPs Delegated Regulation to be undertaken during the course of 2019, including to launch a consultation on the draft regulatory technical standards
Furthermore, ESAs issued a supervisory statement regarding the performance scenarios to promote consistent approaches and improve the protection of retail investors prior to the conclusion of the review. ESAs consider that there is a risk that retail investors are provided with inappropriate expectations about the possible returns they may receive. Therefore, ESAs recommend creators of PRIIPs to include a warning in the KID to ensure that retail investors are fully aware of the limitations of the figures provided in the performance scenarios.
Related Links
Keywords: Europe, EU, Insurance, KID, PRIIPs, Performance Scenarios, ESAs
Previous Article
FED Releases Scenarios for the CCAR and DFAST Exercises in 2019Related 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.
