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
Previous ArticleDNB Publishes Banking and Insurance Newsletters for February 2019
PRA, via the consultation paper CP12/20, proposed changes to its rules, supervisory statements, and statements of policy to implement certain elements of the Capital Requirements Directive (CRD5).
EIOPA published the financial stability report that provides detailed quantitative and qualitative assessment of the key risks identified for the insurance and occupational pensions sectors in the European Economic Area.
EBA published its risk dashboard for the first quarter of 2020 together with the results of the risk assessment questionnaire.
EBA announced that the next stress testing exercise is expected to be launched at the end of January 2021 and its results are to be published at the end of July 2021.
PRA published the consultation paper CP11/20 that sets out its expectations and guidance related to auditors’ work on the matching adjustment under Solvency II.
MAS published a statement guidance on dividend distribution by banks.
APRA updated its capital management guidance for banks, particularly easing restrictions around paying dividends as institutions continue to manage the disruption caused by COVID-19 pandemic.
FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany.
EBA issued a statement reminding financial institutions that the transition period between EU and UK will expire on December 31, 2020; this will end the possibility for the UK-based financial institutions to offer financial services to EU customers on a cross-border basis via passporting.
SRB published guidance on operational continuity in resolution and financial market infrastructure (FMI) contingency plans.