The Joint Committee of the ESAs submitted a Technical Advice to the EC to set minimum requirements that “manufacturers” of packaged retail and insurance-based investment products with environmental or social objectives (EOS PRIIPs) should comply with, to ensure that they offer products meeting the needs of retail investors. ESAs also published a summary of comments on consultation paper (CP-17-002) on the EOS PRIIPs.
The Technical Advice includes summaries of the responses received, the ESAs’ assessments of the responses, and sets out the final advice of the ESAs as a basis for the delegated acts to be adopted by the EC. The Technical Advice includes an impact assessment in view of different policy options that were considered by the ESAs in preparing the Technical Advice. The manufacturer of an EOS PRIIP is required to install specific governance measures to ensure that environmental or social objectives of the product are met on an ongoing basis. Furthermore, the product has to demonstrate to retail investors throughout the investment process the relevance of these objectives. In its Advice, the ESAs addressed four areas of PRIIPs with environmental or social objectives and recommended that a PRIIP manufacturer should:
Target environmental or social objectives has to clearly specify these objectives, together with an appropriate and proportionate strategy on how to achieve them
Disclose to the retail investors the objectives and how these will be achieved
Install and document governance and monitoring measures, where the latter need to be proportionate to the objectives and strategy how to achieve the objectives
Conduct regular reviews on the progress made in achieving the specified and disclosed objectives
Acknowledging the cross-sectoral dimension and the need for the rigorous assessment to address potential gaps, the ESAs specified, for each of these four areas, the required regulatory outcome and an assessment of existing rules. The ESAs concluded that at this time the establishment of specific and detailed standalone obligations for PRIIPs targeting specific environmental or social objectives would not be proportionate. Existing sectoral measures offer already, or are already in the process of putting in place, a sufficiently stringent and flexible basis for the sound regulation of PRIIPs targeting environmental and social objectives.
Keywords: Europe, EU, Insurance, EOS PRIIP, Technical Advice, ESAs
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