Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) No 1286/2014 of the European Parliament and of the Council on key information documents for packaged retail and insurance-based investment products as regards the date of its application

Regulation (EU) No 1286/2014 was adopted on 26 November 2014 with the objective of increasing the protection of retail investors investing in packaged retail and insurance-based investment products (PRIIPs). It also aims to restore consumer trust in the financial services industry after the financial crisis.

In order to fulfil these objectives, Regulation (EU) No 1286/2014 requires that PRIIPs manufacturers comply with a uniform set of product disclosure requirements and that retail investors receive the key information document (KID) on the offered PRIIPs. The disclosed information should enable the retail investors to better understand the economic nature and risks of a particular product and to allow for comparison between different offers. Moreover, greater transparency and harmonization will also benefit the internal market in financial services by creating a level playing field among different products and distribution channels.

Regulation (EU) No 1286/2014 sets the form and content of the KID. In order to further standardise various features of the KID and to take account of important differences among types of PRIIPs, the European Supervisory Authorities ('ESAs': European Insurance and Occupational Pensions Authority, European Banking Authority and European Securities and Markets Authority) are tasked with the preparation of regulatory technical standards (RTS) specifying the presentation and the content of the KID, the standardised format of the KID, the methodology underpinning the presentation of risk and reward and the calculation of costs, as well as the conditions and the minimum frequency for reviewing the information contained in the KID and the conditions on fulfilling the requirement to provide the KID to retail investors.

On 6 April 2016, the ESAs jointly submitted the draft RTS on the KID for PRIIPs to the Commission. The draft RTS were endorsed by the Commission on 30 June 2016 by adopting the Delegated Regulation on KID. During the scrutiny period, the Council raised no objections to the Commission Delegated Regulation. However, on 14 September 2016, the European Parliament rejected it. The European Parliament called on the Commission to review the provisions relating to multi-option PRIIPs, performance scenarios and comprehension alert. Moreover, the European Parliament and a large majority of Member States asked the Commission to defer the date of application of Regulation (EU) No 1286/2014, arguing that the absence of the technical standards would hinder the smooth application of that Regulation.

Regulation (EU) No 1286/2014 is directly applicable as of 31 December 2016 and it does not link the production of a KID to the adoption of the delegated act. While the provisions of the Regulation could be applied by PRIIPs manufacturers and enforced by competent authorities without the adoption of the Delegated Regulation, it is desirable to provide as much clarity as possible on the technical standards specifying the content of certain rules. Given the exceptional circumstances that have led to delays in the adoption of the Delegated Regulation, the Commission proposes to defer the date of application of Regulation (EU) No 1286/2014 by 12 months in order to reduce legal uncertainty and give more time to PRIIPs manufacturers to prepare for the application of the new rules.

EUR-Lex: COM(2016)709: Follow the progress of this proposal through the decision-making procedure http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2016:709:FIN

ESO: Background information: Commission extends the application date of the PRIIPs Regulation by one year http://www.europeansources.info/record/commission-extends-the-application-date-of-the-priips-regulation-by-one-year/

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