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.
Keywords: Europe, EU, Insurance, KID, PRIIPs, Performance Scenarios, ESAs
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