The European Association of Co-operate Banks (EACB) together with several other trade associations have submitted joint comments on the European Commission’s proposed quick fixes to the PRIIPs Regulation and UCITS Directive. The legislative amendments aim to avoid a situation where retail investors would receive both pre-contractual information documents under the PRIIPs Regulation (i.e. the KID) and the UCITS Directive (i.e. the KIID) for the same financial product. As it stands, the UCITS exemption from the requirement to provide the KID to investors, shall end on 31 December 2021.
On 7 September, the Commission adopted the PRIIPs RTS which extended the application date to 1 July 2022, also with the aim to provide the same extended six months for the UCITS exemption. Despite this transitional arrangement, we note that this would leave an insufficient transitional period for all the market players to switch from the UCITS KIID to the PRIIPs KID. This is because implementing these changes involves numerous dialogues along the PRIIPs value chain, between manufacturers and distributors, as well as other stakeholders. In addition, the changes require the involvement of various departments and competencies to interpret the new requirements, gather new data, properly plan and make IT changes, adapt the training for staff and distributors.
The industry believes that, to ensure an orderly implementation, a 12-month implementation period is at minimum required by all products and all market participants. We also require a reasonable, synchronized application date for both Level 1 and Level 2 amendments.
In this context, we would support that the application date of the PRIIPs RTS begins on 1 January 2023, in line with the end-date of the UCITS exemption being 31 December 2022. This is based under the assumption that the PRIIPs RTS will be published in the Official Journal of the European Union by 31 December 2021. Depending on the publication date, we reiterate that a 12-month implementation period is definitely required for a successful transition.
In order to find more information on our position and additional suggestions on the amendments, please download our position papers.