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Article (99/285)
European regulation update: focus on PRIIPs
European regulation update: focus on PRIIPs

European regulation update: focus on PRIIPs


The latest regulatory developments on PRIIPs regulation

Regulation on key information documents for packaged retail and insurance-based investment products (PRIIPs)

The PRIIPs regulation, adopted in December 2014, is a key element of legislation to improve the quality of information provided to retail investors in the European Union (EU) and to enable them to easily compare risks, performance and costs of different investment products. For this purpose, any distributor of investment funds, life insurance products or derivatives (for example, forward exchange) will have to provide to any retail investor present in the EU, a standardised document known as a KID (key information document). This document will present the main features of an investment product in a simple and accessible way. Regardless of the investment product, the KID is limited to a three-page document and includes mainly:

  • Information on the manufacturer of the investment product

  • Explanation on the objectives of the product and the profile of targeted investors

  • A comprehension alert for complex products

  • A risk indicator

  • A table of performance scenarios

  • A table on costs

  • Information on the optimal holding period and the impacts of an early exit


At the end of 2016, European legislators postponed for one year the entry into force of PRIIPs, which was originally due to take effect on 1 January 2017.  On 8 March 2017, the European Commission (EC) adopted amended regulatory technical standards (RTS) on KIDs under PRIIPs. These standards were previously adopted by the Commission on 30 June 2016 and subsequently revised following the rejection and requests for amendments by the European Parliament on 14 September 2016. The Commission's amendments concern multi-option PRIIPs, performance scenarios, comprehension alert and presentation of administrative costs in relation to biometric components of insurance-based investment products. In particular:

  • Key information documents will now include a fourth stress scenario

  • Calculation methods have not changed and past performance of the product will not be stated in the KID

  • Comprehension alerts will be linked to MiFID II complexity definitions

  • Clarification on the treatment of multi-option PRIIPS including the use of UCITS KIID (key investor information document) and synthetic risk and reward measures in certain circumstances


From now on, the European Parliament and the Council have a period of three months to validate or to object the RTS. At the end of this period, the RTS will be published in the Official Journal of the EU (OJEU) and Level 3 measures in the form of Questions / Answers (Q&A) should be published. The RTS will come into force on 1 January 2018.

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Additionally, on 10 February 2017, the European Supervisory Authorities (ESAs - ESMA, European Banking Authority and European Insurance and Occupational Pensions Authority) launched a public consultation on minimum requirements for PRIIPs pursuing environmental and social objectives (EOS). The consultation is a follow-up to a European Commission Call for Technical Advice on potential product oversight and governance (POG) rules for ensuring that only credible products are marketed under the label of EOS PRIIPs. The consultation paper itself features an assessment of whether existing POG rules included in other EU legislation (e.g. MiFID or IDD- Insurance Distribution Directive) are sufficient to be applied in the context of EOS products under the PRIIPs regulation. The consultation closed on 23 March 2017.

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