The European Parliament’s Economic and Monetary Affairs Committee has unanimously adopted a resolution that objects to the European Commission’s proposed Delegated Regulation supplementing the Regulation on key information documents for packaged retail and insurance-based investment products (PRIIPs Regulation). The draft Delegated Regulation sets out regulatory technical standards (RTS) on the presentation, content, review and revision of key information documents (KIDs) and the conditions for fulfilling the requirement to provide such documents.
The press release notes that some MEPs argued that the proposed formulas for predicting investment performance contained flaws which would make performance look far better than it was likely to be. Other MEPs were doubtful that the KID adequately reflected the risks of investing with concerns regarding the use of generic statements found on investment products such as “the value of your investment may go up and down.”
The measure will now be put to a full plenary vote in September and the European Parliament must either support or reject the motion.
The RTS are designed to accompany the PRIIPs Regulation which is due to come into force on 31 December 2016. The press release notes that a member of the European Commission stated that the ideal solution would be to introduce both the PRIIPs Regulation and the technical standards at the same time. However, he added that as a “second best option” the Commission was prepared to allow the introduction of the PRIIPs Regulation without the technical standards.
View ECON Committee unanimously rejects Commission’s investor protection proposals, 1 September 2016