The European Supervisory Authorities - ESAs (the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority) submitted today to the European Commission the draft Regulatory Technical Standards (RTS) on amendments to the key information document for packaged retail and insurance-based investment products (PRIIPs).
Following a request from the European Commission in December 2020 , EIOPA’s Board of Supervisors further analysed the draft RTS which was adopted today by a qualified majority of EIOPA’s Board.
While some national competent authorities at EIOPA’s Board continued to express reservations on the draft RTS, they supported the proposal based on the further details provided by the European Commission on their approach to the broader review of PRIIPs Regulation, namely that the review will thoroughly examine the application of the PRIIPs framework, including:
- how to achieve better alignment between PRIIPs, Insurance Distribution Directive and Markets in Financial Instruments Directive II regarding provisions on costs disclosure;
- the scope of products as foreseen by the PRIIPs Regulation;
- how to ensure that the KID contains the key information necessary for retail investors while avoiding too much or too complex information for these investors;
- how to allow the creation of a digitalised KID allowing layered information and reviewing the default paper basis of the KID, taking into account the specific challenges for different types of products (e.g. multi-option products (MOPs));
- the need for a more tailored approach, such as for MOPs, in order to maximise understanding and use of the information, while continuing to allow for comparability of similar products.
In July 2020 the ESAs informed the European Commission of the outcome of a review that had been conducted on the PRIIPs key information document. This followed an ESA consultation paper published on 16 October 2019 on draft RTS to amend the technical rules on the presentation, content, review and revision of KID (Delegated Regulation (EU) 2017/653). At that stage, the draft RTS was adopted by the Board of Supervisors of ESMA and EBA, but did not receive the support of a qualified majority at the Board of Supervisors of EIOPA.
In December 2020, the Commission invited the ESAs to submit an RTS to amend the KID within a six week period referring to the need to make urgent amendments to European Commission’s Delegated Regulation (EU) 2017/653.
Following the submission to the European Commission, the ESAs draft RTS is now subject to adoption. If adopted by the European Commission, the RTS would be subject to non-objection by the European Parliament and the Council of the European Union.