FCA published a feedback statement in response to its Call for Input on the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation. FCA had sought views and evidence on market participants’ initial experiences of the requirements introduced by the PRIIPs Regulation (EU Regulation No 1286/2014) and the related PRIIPs regulatory technical standards (Commission Delegated Regulation (EU) 2017/653), together with the PRIIPs legislation. The PRIIPs legislation took effect in January 2018.
FCA received 103 responses from firms, trade bodies, and consumer organizations that are producing, advising on, or distributing PRIIPs and preparing and providing Key Information Documents (KIDs). The published feedback statement summarizes responses received, sets out FCA response to the feedback received, and outlines options to address areas of concern. This statement is of interest to issuers of securities that are classed as PRIIPs; life companies; discretionary investment management firms; firms providing services in relation to insurance-based investments; fund managers; wealth managers; stockbrokers and other firms that provide advice to retail clients on funds, structured product;s and derivatives; financial advisers; and firms operating retail distribution platforms.
The concerns raised by respondents about uncertainty of scope of products needing to comply with PRIIPs and the unintended effects of compliance requirements are particularly serious and may risk causing consumer harm, if not addressed. In the areas mentioned by respondents, FCA is seeking and encouraging swift and effective action from EU institutions. FCA will consider the extent to which domestic interpretive guidance could mitigate these issues. This work will take into account the UK’s future relationship with the EU.
As a next step, FCA will continue to work closely with ESAs and EC through 2019, subject to the nature of the UK’s relationship with the EU. FCA will also continue to monitor the impact of the PRIIPs regime and investigate the scale of potential consumer harm in this area. FCA will work with trade bodies, consumer groups, and firms in the industry to ensure that PRIIPs delivers the intended outcomes for consumers. The full review of the PRIIPs Regulation is anticipated to be completed by the end of 2019.
Keywords: Europe, EU, UK, Insurance, Feedback Statement, PRIIPs Regulation, KID, Call for Input, FCA
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