What we are changing
We are changing the PRIIPS regulation after analysing the feedback we received to our consultation CP21/23. We are:
- introducing rules to clarify the scope of the PRIIPs Regulation for corporate bonds, making it clearer that certain common features of these instruments do not make them into a PRIIP
- introducing interpretative guidance to clarify what it means for a PRIIP to be ‘made available’ to retail investors
- amending the PRIIPs Regulatory Technical Standards to:
o replace the requirements and methodologies for presentation of performance scenarios in the KID with a requirement for narrative information on performance to be provided
o address the potential for some PRIIPs to be assigned an inappropriately low summary risk indicator in the KID
o address concerns about certain applications of the ‘slippage’ methodology when calculating transaction costs
Who this affects
This will directly affect all those manufacturing, selling, or advising on a PRIIP, including but not limited to:
- issuers of securities that are or may be classed as PRIIPs (including those that do not require Part 4A authorisations under FSMA)
- life companies and discretionary investment management firms
- firms providing insurance-based investments services
- fund managers, wealth managers and financial advisers
- stockbrokers and other firms that provide advice to retail clients on funds
- issuers of structured products and derivatives
- firms operating retail distribution platforms
This PS will be of interest to consumers, consumer organisations and trade bodies.
In July 2021, we consulted (in CP21/23) on proposals to address the most serious and persistent concerns identified through our Call for Input and ongoing monitoring of the onshored PRIIPs regulation.
We proposed targeted amendments to the disclosure requirements in our Handbook rules and Guidance, and the RTS.
The Handbook rules and RTS will come into force on 25 March 2022, with a transition period which will end on 31 December 2022, by which date firms must apply the new requirements.
For information regarding our next steps for the PRIIPs Regulation, please see our Regulatory Initiatives Grid.