The German Investment Funds Association BVI considers that the proposals of the European Parliament’s Committee on Economic and Monetary Affairs (ECON) on Packaged Retail and Insur- ance-based Investment Products (Priips) are a great step forward in the discussions regarding the flaws in the legislation for new investor infor- mation.
Thomas Richter, chief executive officer of BVI, commented: ‘This is an important step for European consumers. The longer deadlines give us more time to work with the regulatory authorities to remedy the shortcomings in the PRIIPs KID. Logically, this should take place during the review of the PRIIPs rules scheduled for next year.’ The review should not be restricted to the detailed rules of the European supervisory authorities (ESAs). In the view of BVI, parts of the PRIIPs Regulation itself also need to be subjected to a further critical review.
Yesterday ECON passed a draft resolution for the EU Parliament to extend two important deadlines: the requirement for retail funds to use the Priips Kid will start from 2022 instead of 2020; until that date they can continue to use the key investor information documents (Kiids) for Undertakings for Collective Investments in Transferable Securities (Ucits). The deadline for the planned review of the PRIIPs rules has also been extended by one year until the end of 2019.
BVI now no longer sees any reason for the ‘quick fix’ of the flaws, as pro- posed by the ESAs at the beginning of November, and is calling for this plan to be abandoned. Thomas Richter: ‘The PRIIPs KID is intended to serve as a basis for investment decisions by 50 million European retail investors, so thoroughness is more important than speed.’
According to BVI, the ‘quick fix’ approach contained in the ESAs’ consultation paper does not solve the two most contentious outstanding issues: the misleading calculations of transac- tion costs and performance scenarios.