On 22 October 2021, the European Parliament’s ECON Committee, by way of simplified procedure, approved two legislative proposals: one to further extend the implementation of the revised amendments to the Delegated Regulation governing the format and content of the PRIIPs KID (“Delegated Regulation”) to 1 January 2023 and one to further extend the exemption for UCITS having to provide a PRIIPs KID to 1 January 2023. The two legislative proposals follow a respective draft compromise proposed by the Presidency of the Council of the EU on 17 September 2021. The new implementation timeline was heavily lobbied for by the fund industry. It reflects the industry’s need for sufficient time to adapt its operations surrounding the issuance of key investor documents.
The EU Parliament’s approval will most likely be formally confirmed at the Parliament’s next plenary session in November. The timeline for the adoption by the Council of the EU of the compromise proposed by the Presidency is at the time of this publication not known.
Earlier this year, the EU Commission also published other legislative proposals within this context:
Uncertainty concerning the proposed co-existence of the PRIIPs KID and the UCITS KIID
On 15 July 2021, the EU Commission adopted, among others, a legislative proposal for an amendment of the UCITS Directive with the aim to accommodate the PRIIPs KID. Unfortunately, the EU Commission’s proposal does not suggest to fully replace the UCITS KIID for professional investors. The proposed co-existence of the PRIIPs KID and the UCITS KIID entails a number of questions to which the fund industry is seeking clarity and where it currently seems that the UCITS KIID is not necessary as long as a PRIIPs KID is produced.
Certainty concerning the proposed revision of the content of the PRIIPs KID
In September of this year, the industry finally received clarity on the content of the PRIIPs KID. On 7 September 2021, the EU Commission adopted and published the text of its proposal to amend the Delegated Regulation. The Delegated Regulation sets out the rules for, among others, the methodologies, content and format of the PRIIPs KID. Notable amendments to the Delegated Regulation include:
- Changes to the methodologies for the calculation of performance scenarios;
- Changes to prescribed narratives and introduction of additional narratives for certain products;
- Changes to the methodology for the calculation of certain costs;
- Introduction of the requirement to display past performance for certain Category 2 products (notably UCITS and open-ended AIFs).
For further information, please contact your usual contact within the Fund Formation group.
To access ECON’s proposed text amending the UCITS Directive, please click here_
To access ECON’s proposed text amending the PRIIPs Regulation, please click here_
To access the proposed text amending the PRIIPs Delegated Regulation, please click here_
To access the Annexes to the proposed text amending the PRIIPs Delegated Regulation, please click here_