On 9 November, the European Commission formally discussed and ultimately proposed an extension to the date of application of the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation which was due to take effect on 31 December 2016.
As reported in the September edition of the Arthur Cox Regulatory Update the European Parliament rejected the propsed Regulatory Technical Standards (RTS) which set out the format and methodology used to compile the Key Information Documents (KID). Following this the European Parliament and the Council of the EU, by a majority of Member States, called for the entry into application of the PRIIPs Regulation to be postponed.
The European Commission believes that having the RTS in place before the entry into application of the PRIIPs Regulation would better serve the aims of the regulation. Therefore, issuers and distributers of PRIIPs now have until 1 January 2018, a deferral of 12 months, to put the relevant provisions in place.
On 10 November, the European Commission wrote to the three European Supervisory Authorities (ESAs). In its letter the European Commission stated its intention to amend the provisions of the RTS relating to multi-option PRIIPs, the methodology for the calculation of future performance scenarios and the use of the `comprehension alert'. The ESAs now have 6 weeks to resubmit the revised RTS to the European Commision on the basis of the proposed amendments. The letter invites the ESAs to submit amended RTS to the Commission in the form of a formal opinion as soon as possible. Once the RTS is adopted by the European Commission it will still be subject to scrutiny by the European Parliament and the Council of the EU. It is expected that during the first half of 2017 the revised framework will be in place.