The European Association of Co-operative Banks (EACB) welcomes the opportunity to contribute to the ESAs Joint Consultation paper on PRIIPs key information documents(KID) as cooperative banks are amongst the major distributors of a large variety of retail investment products.
Apart from the specific responses to the consultation questions, the EACB would like to note that the strict application of the PRIIPs Regulation to already existing products would be highly problematic for issuers. Given that the design of the Level II requirements will be completed at the earliest during the first half of 2016, PRIIPs producers are already facing significant problems to create the kids for the newly issued products on time. The implementation would be almost impossible if manufacturers of existing products that are traded on secondary markets would need to create key information documents too.
Due to the huge practical problems the above approach regarding the applicability of PRIIPs Regulation on existing products should be reviewed immediately. If nevertheless this in not done in the worse case scenario other practical solutions should be explored, such as limiting the applicability of PRIIPs to actively offered products.
Moreover, as has been said before in many cases the suggested approaches are not suitable for OTC derivatives contracts. Its seems that the ESAs have not yet taken into account the specificities of OTC. For this reason we -once more- have to argue strongly against the inclusion of OTC derivatives in the scope of application, in particular when they are sold for hedging purposes.
In addition, we propose that, in the case of UCITS used as investment options for of multi-option products (MOP), there be a KID athe level of the insurance contract and a reference made to the UCITS KIID with regards to the investment options. If and where information would be lacking as the fields are different in UCITS KIID and PRIIPs KID, we suggest that the asset manager transmits the lacking information to the insurer that will be able to complement the KID accordingly.
For further information on this topic or to read the EACB response, please download the PDF.