French financial sector challenges PRIIPs standards
Nine associations from the French financial sector, including French asset management association AFG, have expressed their concerns about the adoption of regulatory technical standards (RTS) for the new Priips (Packaged Retail and Insurance-Based Investment Products) regulation by the European commission last June.
Priips regulation that is to be implemented as from 1 January 2017 aims to improve product information given to investors through a key information document.
The RTS have been submitted to the European parliament and council for approval until 30 September. Associations from the French financial sector ask both institutions to object in order to review RTS’ criteria and to postpone the implementation of Priips in a joint press release.
They argued that if none of them does, Priips would only provides investors a non-transparent and deceptive information that would not protect them.
They explained that players from the financial sector are now under pressure as the deadline is too tight to implement a regulation whose final version would eventually be released during the fourth quarter of 2016.
Priips regulation mentions that asset managers already producing key information documents would benefit from a transition period that should run until 31 December 2019 to be compliant.
However, the associations argue that RTS have suspended that transition period and set up a deadline on 31 December 2016 to be in line with the text.
The nine associations said that given the complexity, the cost and the multiple documents that should be provided to investors, insurers may seriously consider the reduction of options and assets proposed in the contracts of insurance-based investment products.
They underlined that it would result into the end of open architecture as well as in a drop in the product offering to investors. Also, the implementation of the regulation, as per se, would harm the diversity of players in the French financial industry.