The European Parliament’s announcement that it has no objection to the new Regulatory Technical Standards (RTS) for PRIIPs demonstrates a fantastic turnaround. The European Commission has managed to achieve in three weeks what has typically taken three months of negotiation.
Praise is due to the Commission for succeeding in getting the RTS accepted after their rejection last year delayed the implementation of PRIIPs by a year.
The key items revised were:
- multi-option products and use of UCITS funds
- additional performance scenario
- products requiring comprehension alerts
- clarification on Biometric risk premium
In a meeting with the Commission recently, we were very encouraged by the Commission’s desire to engage with the industry. While the Commission knew it had three months to consult with Parliament, it took the view that regulated companies would be aided by a swift resolution, an important sign that businesses are being heard.
With the new RTS in place, insurers, fund managers, banks and third parties can now proceed with the collection of EPT data (step 1 in the PRIIPs process), as the guidelines clearly identify the items that need to go into the Key Information Document (KID).
The commission has stated that they expect to have two sets of questions and answers, the first of which will be out in the coming weeks. We expect guidance on calculations (step 2) and document production (Step 3). If all parties start the work now, they will be ready for the January 2018 deadline.