EFAMA and several other financial industry associations, raised concerns in response to a consultation conducted by the European Commission on planned changes to the Packaged Retail and Insurance-based Investment Products (PRIIPs) framework.
The unexpected delay to the adoption of the revised PRIIPs RTS cuts the implementation period for the industry by more than two months. This leaves PRIIPs manufacturers and distributors with a too short period instead of the original timeframe of 12 months to implement the new rules.
The currently proposed implementation period is too short, especially for new rules that relate to communication with investors and potential investors. It will be important, if we are to achieve the desired outcomes of better trust and understanding among investors and potential investors, to ensure that manufacturers have adequate time to adapt to these changes. This will avoid the need for them to make subsequent adjustments, which would only cause more confusion and would be to the detriment of consumers and Europe’s wider economy.
Any amendment to the PRIIPs RTS requires significant implementation efforts involving numerous departments and competences to interpret the new requirements, to gather new data, to make actuarial and financial calculations, to properly plan and make changes to software and other IT systems, to redesign the templates, to test the calculations and design, to legally assess the narratives and figures, to possibly translate them into different languages, to draft new documents and to adapt the training for distributors, in addition to the digital developments beyond the PRIIPs KID to implement the new website disclosure requirements, etc. (see our infographic for more details: The challenges of replacing UCITS KIIDs with PRIIP KIDs | EFAMA)
Therefore, to ensure an orderly implementation, the financial sector associations called for a 12-month implementation period beginning after the adoption of the RTS by the College of Commissioners, as this is the minimum time needed for all products and all market participants. A reasonable, synchronised application date for both the Level 1 and Level 2 amendments will be key.