EFAMA continues to support the overarching aim of the PRIIP KID as a single pre-disclosure document for all types of investment products.
EFAMA believes that the ESAs Joint Call for Evidence on PRIIPs and any subsequent proposals for revision of the PRIIPs Regulation should come after assessing in practice the revised PRIIPs RTS to be implemented from 31 December 2022, both to retail AIFs and UCITS.
We therefore consider any substantial changes to the PRIIPs framework to be based on empirical evidence and consumer testing. This allows shortcomings to be properly identified before substantial changes are proposed. It is clear that this essential evidence gathering step can only happen well after UCITS funds have started producing the PRIIP KID.
EFAMA has conveyed through this Call for Evidence some recommendations that we believe should have been in the current version of the PRIIPs Regulation and its RTS:
- EFAMA believes that information on past performance in the KID in the case of linear products like investment funds should be integrated in Article 8 of the PRIIPs Regulation.
- Regarding the use of digital media, EFAMA believes that the recent MiFID ‘digital first’ disclosure policy, which established electronic disclosures by default while allowing investors to request paper disclosures, could be considered for the PRIIPs KID.
- EFAMA considers that certain design elements of the PEPP KID may help investors’ comprehension and should be considered in a future review to confirm whether these elements also suit the PRIIP KID.
- Regarding the possible differentiation between various types of PRIIPs, EFAMA favours flexibility, as each type of investment product provides a different value proposition and thus requires slightly different disclosures on costs and performance.
- The current overly prescriptive nature of the PRIIP KID makes it impossible to insert the (soon to be needed) ESG information into the PRIIP KID
- We highlighted numerous existing substantial inconsistencies between MiFID/IDD and PRIIPs in how product cost information is calculated and presented to investors.
The proposed changes in the PRIIPs Regulation should only be treated as adjustments to the existing framework – with limited value due to the forthcoming implementation of the revised RTS and their extension of the scope to UCITS.