HM Treasury Outlines Approach to Amend PRIIPs Regulation in UK
HM Treasury published a policy statement on its proposed approach to bringing forward amendments to the onshore Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation to avoid consumer harm and provide the appropriate certainty to industry once the UK ceases to be bound by the EU regime. The proposed amendments target the most pressing concerns with the PRIIPs regulation and are intended to ensure that UK retail investors are provided with more appropriate PRIIPs disclosures. In the longer term, HM Treasury intends to conduct a more wholesale review of the disclosure regime for UK retail investors. HM Treasury plans to bring forward amendments to the onshore PRIIPs regulation to improve the functioning of the PRIIPs regime in the UK when parliamentary time allows.
The PRIIPs regulation sets the requirements for a standardized disclosure document, known as the Key Information Document (KID), that must be provided to retail investors when they purchase particular packaged investment products, known as PRIIPs. The regulation is supplemented by regulatory technical standards laid down in the EU Commission Delegated Regulation 2017/653 (laying out regulatory technical standards) that sets out further detail on the requirements under PRIIPs. The proposed amendments will enable FCA to make supplementary provisions and amendments to these regulatory technical standards with a view to avoiding consumer harm, addressing distortions of competition, and providing the appropriate certainty to industry. HM Treasury intends to make the following changes to the onshore PRIIPs regulation.
- An amendment enabling FCA to clarify the scope of the PRIIPs regulation through the rules. HM Treasury proposes an amendment, which delegates a power to FCA to clarify the scope of PRIIPs through rules. This would enable FCA to address existing, and potentially future, ambiguities in relation to certain types of investment products. The definition of a PRIIP will remain unchanged.
- An amendment to replace "performance scenario" with "appropriate information on performance" in the PRIIPs Regulation. HM Treasury proposes an amendment to replace the term "performance scenario" with "appropriate information on performance" in the PRIIPs regulation. FCA will then be able to amend the regulatory technical standards to clarify what information on performance should be provided in the KID.
- An amendment enabling HM Treasury to further extend the exemption in place for Undertakings for the Collective Investment in Transferable Securities (UCITS) funds. HM Treasury proposes an amendment that delegates power to the Treasury to further extend the exemption for UCITS for up to a maximum of five years. This will enable HM Treasury to consider the most appropriate timing for transition of UCITS funds into any domestic successor; this may result from the planned review of the UK framework for investment product disclosure and bring forward a Statutory Instrument to amend the exemption date in the PRIIPs regulation, as necessary.
Related Links
Keywords: Europe, UK, Banking, Securities, Insurance, PRIIPs Regulation, PRIIPs, KID, Disclosures, Regulatory Technical Standards, FCA, HM Treasury
Previous Article
EIOPA Report Identifies Key Financial Stability Risks for InsurersRelated Articles
FSB Sets Out Effective Practices for Cyber Incident Recovery
FSB finalized the toolkit of effective practices to assist financial institutions in their cyber incident response and recovery activities.
HKMA Urges Early Action for Adherence to IBOR Fallbacks Protocol
HKMA urged authorized institutions to take early action to adhere to the IBOR Fallbacks Protocol, which ISDA is expected to publish soon.
FSB Sets Out Roadmap for Transition to Alternative Reference Rates
FSB published a global transition roadmap for London Inter-bank Offered Rate (LIBOR).
HM Treasury Publishes Response to Proposal on BRRD2 Transposition
HM Treasury published a document that summarizes the responses received from a consultation on the approach of UK to transposition of the revised Bank Resolution and Recovery Directive (BRRD2).
HM Treasury Publishes Response to Proposal on CRD5 Transposition
HM Treasury published the government response to the feedback received on the consultation for updating the prudential regime of UK before the end of the Brexit transition period.
BoE Publishes Reporting Schedule for Statistical Returns
In a recent statistical notice, BoE announced publication of the reporting schedule for statistical returns for 2021.
EC Welcomes Declaration by Member States on EU Cloud Federation
EC welcomed the joint declaration by 25 EU member states on building the next generation of cloud in Europe.
PRA Updates Supervisory Statement on Counterparty Credit Risk
PRA published the final policy statement PS22/20, which contains the updated supervisory statement SS12/13 on counterparty credit risk.
FSB Publishes Update on Work to Address Market Fragmentation
FSB published an update on its work to address market fragmentation. FSB is working in this area in collaboration with the other standard-setting bodies.
EBA Proposes to Revise Guidelines on Incident Reporting Under PSD2
EBA proposed revisions to the guidelines on major incident reporting under the second Payment Service Directive (PSD2).
