As had been widely expected, on 9 November 2016 the European Commission published a proposal to defer the entry into force of the PRIIPs Regulation (Regulation 1286/2014) for a period of twelve months to 1 January 2018. This move follows the rejection by the European Parliament in September 2016 of the draft regulatory technical standards (RTS) setting out the detailed requirements that will sit behind the PRIIPs Regulation. One effect of this delay will be PRIIPs and MiFID II becoming effective at broadly the same time.
The twelve-month delay is intended to give the relevant European Supervisory Authorities (or ESAs, the EU-level financial services regulators) sufficient time to produce revised RTS that the Parliament is willing to approve, and thereafter to allow firms sufficient time to make arrangements for compliance with the PRIIPs regime.
The Commission has asked the ESAs to make changes to certain specific areas of the RTS, namely in relation to multi-option products, performance scenarios, comprehension alert and presentation of insurance related costs. As such, the reopening of the RTS will not change any of the principal requirements under the PRIIPs Regulation.
Revised draft RTS are expected to be submitted to the European Commission by the ESAs within the next six weeks. This does not give the ESAs much time to revise the RTS and as such there will be concerns that the issues raised by the Parliament and industry trade bodies will not be addressed in their entirety.
The Commission expects the revised PRIIPs framework to be in place during the first half of 2017. As such firms should continue to implement their PRIIPs compliance projects, with a view to finalising those projects in 2017 once the RTS have been finalised.