Timeliness critical for PRIIPs, finds Silverfinch
Following the success of its PRIIPs event earlier this year, Silverfinch, the leading look-through and data distribution utility for client regulatory reporting, recently hosted a dedicated PRIIPs event in Dublin, examining the industry’s readiness and understanding of the impending regulation.
While the PRIIPs deadline has been pushed back to January 2018, the overwhelming view from the industry was that both asset managers and insurers need to get ahead to prepare for the regulation well ahead of this date. Both have experienced significant leeway from the regulator with regards to Solvency II, which came into effect this year, but with PRIIPs, the data forms part of the legal engagement between the investor and the PRIIPs provider – and without this data exchange, business will simply stop.
A poll at the event showed that 20% of product manufacturers have paused on their preparations following the delay, a pause which Karl Murray, Consulting Actuary at Milliman warned is “a bad idea”, particularly as PRIIPs and MiFID II will now be implemented on the same date – providing a double headache for the industry. “The scale of regulation is massive” added Jeff Willems, SVP Business Development, Silverfinch, “even with this extra year we will still be tight on time.”
The changing deadline for PRIIPs has meant that insurers and asset managers are now communicating much better with each other in order to work together. However, this preparation is not consistent across the market. Jeff Willems added, “When speaking with our contacts about PRIIPs implementation…life firms are less prepared” and Robert McNamara, Sales Director at Donnelley Financial Solutions pointed out that, “fund managers and product managers need to work on communicating.”
Commenting on the event, John Dowdall, managing director of Silverfinch said: “The European Commission’s decision to delay the introduction of PRIIPs by 12 months is great news, giving the industry time to put the necessary infrastructure in place.
“However, what is clear from our conversations across the market is that time is still of the essence. All industry players must work more closely together in order to ensure that they are ready for PRIIPs – the ‘gentle approach’ taken by the regulator surrounding Solvency II cannot be continued with the new regulation. What is more, with MiFID II being implemented on the same date, asset managers have their work cut out for them to ensure that they can adhere to both regulations. PRIIPs is certainly achievable within this timeframe and those who prepare now will be the ones to prosper when the ball drops.”
The event follows Silverfinch’s recent expansion of its data model to include the KID data for PRIIPs, allowing asset managers to efficiently share their data with insurance-based investment product manufacturers across Europe and subsequently enable their insurer clients to trade under the new regulation.