The European Securities and Markets Authority has published a letter accompanied by an annex, from the European Commission (the Commission) to the European Supervisory Authorities (ESAs) setting out the amendments it proposes to make to the draft regulatory technical standards (RTS) on key information documents (KID) for packaged retail and insurance-based investment products (PRIIPs).
The Commission calls for the following modifications to the draft RTS:
- multi-option PRIIPs: the Commission proposes to allow manufacturers of multi-option PRIIPs to use the UCITS information document as an appropriate means of providing retail investors with more detailed pre-contractual information;
- fourth performance scenario: the Commission proposes certain amendments to the conditions that trigger inclusion of a fourth performance scenario and consequential adjustments to the existing performance scenarios. In relation to the latter this includes the stress scenario being identified through a stress-test analysis of the historical volatility over a pre-defined short-term period; and
- comprehension alert: the Commission proposes certain criteria to facilitate a consistent use of the comprehension alert in the KID. Such criteria includes the PRIIP investing in underlying assets that are not commonly invested in by retail investors.
The ESAs are invited by the Commission to submit the amended draft RTS at their earliest convenience, and in any event within six weeks. The Commission also invites the ESAs to develop guidance in line with the relevant provisions of the draft RTS.
View The European Commission invites ESAs to amend PRIIPs draft RTS and develop guidance, 11 November 2016
View Annex to the European Commission letter to ESAs, 11 November 2016