The European Securities and Markets Authority (ESMA) has initiated work on a broad review of Delegated Regulation (EU) 2017/653 on key information documents (KID) for packaged retail and insurance-based investment products (PRIIPs).

In a speech delivered by Evert van Walsum, Head of Investors and Issuers Department at ESMA, on 13 May 2019, it was announced that the review will include proposals to address the performance scenarios section of the PRIIPs KID, which proved to show over-optimistic results in certain cases, as well as cost-related issues, such as the presentation and calculation of costs. The review will be complemented by a consumer testing exercise undertaken by the Commission on the different possible amendments to be made to the presentation of performance scenarios, the results of which will be announced by the end of 2019.

The review follows the consultation and final report of the European Supervisory Authorities (ESAs) on amendments to the PRIIPs KID. The ESAs had expressed concerns that inconsistencies in the methodologies underpinning the presentation of risks, performance and costs between the PRIIPs KID and the UCITS key investor information document (KIID) may deter investors from using them rather than facilitating informed investment decision making.

ESMA intends to hold a public consultation to inform the review in the third quarter of 2019. The proposal of the ESAs on the changes to the PRIIPs Delegated Regulation will then be sent to the Commission at the beginning of 2020.