The day has now arrived and KIDs are required for sales of all PRIIPs to retail customers. Many of those involved to date may finally be exhaling after holding their breath for the last few months ahead of the deadline over the festive period.
But don’t think it’s all over just yet!
Article 33 of the Regulation says that “by 31 December 2018, the Commission shall review this Regulation”. With the original date of December 2016, we would have had two years to get used to KIDs by the time of the review, but now the Commission must deliver its review after just a year.
The review will be wide-ranging and requires the Commission to have carried out consumer testing, so it will need to start the process pretty soon. Included in the review will be:
- “a general survey of the operation of the comprehension alert”;
- “a survey of the practical application of the rules … taking due account of developments in the market for retail investment products”;
- “the feasibility, costs and possible benefits of introducing a label for social and environmental investments”;
- “whether the transitional arrangements [for UCITS KIIDs] shall be prolonged, or whether, following the identification of any necessary adjustments, the provisions on key investor information in [UCITS IV] might be replaced by or considered equivalent to the key investor document”;
- “a possible extension of the scope of this Regulation to other financial products”;
- “the appropriateness of introducing common rules on the need for all Member States to provide for administrative sanctions for infringements of this Regulation”;
- “whether to propose a new legislative act guaranteeing appropriate disclosure of product information requirements … or whether to include pension products … in the scope of this Regulation”; and
- “whether [reliable and accurate] online calculator tools which allow the retail investor to compute the aggregate costs and fees of PRIIPs are available … free of charge” and, if not, “the feasibility of … developing draft regulatory technical standards setting out the specifications applicable to such Union-level tools”.
That’s a long shopping list for the Commission and its output could have massive implications for groups, not least the possible changes to plans to convert UCITS KIIDs into PRIIPs KIDs at the end of 2019 and the possible inclusion of pensions and other products in the scope of PRIIPs. Whatever happens, don’t bank on the next couple of years being any quieter for PRIIPs than the last couple.
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