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
APRA Issues Interim Update to Policy Priorities for 2021 and Beyond
In a letter addressed to the industry, the Australian Prudential Regulation Authority (APRA) set out an updated schedule of policy priorities for the banking, insurance, and superannuation industries.
EC Adopts Solvency II and Resolution Rules Package for Insurers
The European Commission (EC) adopted a comprehensive review package of Solvency II rules in the European Union.
OCC Issues Booklets on Regulatory Reporting and Earnings
The Office of the Comptroller of the Currency (OCC) issued Versions 1.0 of the "Earnings" and "Regulatory Reporting" booklets of the Comptroller's Handbook.
ECB Sets Out Results of Economy-Wide Climate Stress Tests
The European Central Bank (ECB) published results of its economy-wide climate stress test, which aimed to assess the resilience of non-financial corporates and euro area banks to climate risks.
EBA Examines Implications of Increasing Use of Digital Platforms in EU
The European Banking Authority (EBA) published a report on the use of digital platforms in the banking and payments sector in European Union.
HKMA Issues Updates on Policy Measures Intended to Ease COVID Impact
The Hong Kong Monetary Authority (HKMA) published updates on the policy measures that were announced in context of the ongoing pandemic.
ISDA Responds to BCBS Proposal on Treatment of Cryptoasset Exposures
The International Swaps and Derivatives Association (ISDA), along with several other associations, submitted a joint response to the Basel Committee on Banking Supervision (BCBS) consultation on preliminary proposals for the prudential treatment of cryptoasset exposures.
BIS Quarterly Review Discusses Developments in Fintech and ESG Space
BIS published the September issue of the Quarterly Review, which contains special features that analyze the rapid rise in equity funding for financial technology firms, the effectiveness of policy measures in response to pandemic, and the evolution of international banking.
BCBS to Consult on Supervisory Practices for Climate Risks by Year-End
The Basel Committee for Banking Supervision (BCBS) met in September 2021 and reviewed climate-related financial risks, discussed impact of digitalization, and welcomed efforts by the International Financial Reporting Standards (IFRS) Foundation to develop a common set of sustainability reporting standards
OCC Identifies Operational Risk Deficiencies in MUFG Union Bank
The Office of the Comptroller of the Currency (OCC) issued a Cease and Desist Order against MUFG Union Bank for deficiencies in technology and operational risk governance.
