On 7 September 2021, the European Commission adopted:

The Commission Delegated Regulation amends Delegated Regulation (EU) 2017/653 on regulatory technical standards (RTS) by setting out, in particular:

  • New methodologies underpinning the calculation of appropriate performance scenarios and a revised presentation of these scenarios, to ensure that retail investors do not have inappropriate expectations about the potential return on investment they may receive.
  • Revised summary cost indicators and changes to the content and presentation of information on the costs of PRIIPs to help retail investors better understand the different types of cost structures, as well as to facilitate the use of this information by persons selling or advising about PRIIPs.
  • A modified methodology underpinning the calculation of transaction costs to address practical challenges that have arisen when applying the existing rules and issues regarding the application to certain types of underlying investments.
  • Modified rules for PRIIPs that offer a range of options for investment to ensure more clarity of the information on their cost implications.

The Commission Delegated Regulation also lays down RTS for information on past performance, which is to be provided by certain types of UCITS, retail alternative funds and insurance-based investment products. The Commission Delegated Regulation is accompanied by amendments to Directive 2009/65/EC to avoid from 1 July 2022, that investors receive two pre-contractual disclosure documents, i.e. the PRIIPs KIDs and the ‘key investor information’ required by that Directive. This will be achieved by clarifying that if UCITS already draw up, provide, revise and translate KIDs, the requirements on ‘key investor information’ as set out in Articles 78 to 82, and Article 94 of that Directive are consequently satisfied.

The Commission Delegated Regulation is also accompanied by amendments to Regulation (EU) No 1286/2014 to extend the transitional arrangement for certain investment funds laid down in Article 32 of that regulation by six months, i.e. to 30 June 2022. To that end, the Commission Delegated Regulation lays down a transitional arrangement under Delegated Regulation (EU) 2017/653 that is consistent with the extended transitional arrangement in Regulation (EU) No 1286/2014. It allows manufacturers of PRIIPs that offer investment funds as the only underlying investment options, or alongside other investment options, to continue using, for the purposes of drawing up PRIIPs KID, UCITS ‘key investor information’ documents drawn up in accordance with Articles 78 to 81 of Directive 2009/65/EC in respect of such funds.

The Commission Delegated Regulation and Annex will now be subject to scrutiny by the European Parliament and the Council. They are scheduled to apply from 1 July 2022. This is intended to coincide with targeted quick-fix amendments of the PRIIPs Regulation and the UCITS Directive, which will end the obligation for retail investment funds to publish UCITS KIIDs as of 1 July 2022, to avoid duplicate pre-contractual disclosures.