Proposal to amend the PRIIP Level 1 Regulation

The European Commission has earlier this year published a number of targeted proposals to amend the PRIIP Level 1 Regulation, implementing more modern rules on how a PRIIP Key Information Document (KID) is provided to investors. The proposed changes aim to change the content of the (KID) which must be provided to retail investors before investing.

Among others, the proposed amendments include:

• New ESG and summarising information sections

Retail investors increasingly seek information on the sustainability performance of investment products. The KID is proposed to include key ESG information on the sustainability profile of products subject to the SFDR in a separate section of the KID. Furthermore, a new section including summarised information about the PRIIP type, cost, summary risk indicator and recommended holding period is also proposed.

• Electronic KID and virtual simulation of costs

The Commission also has proposed that the KID is provided by means of an interactive tool that enables the retail investor to generate personalised information based on the information in the KID, including simulation of cost over a holding period that is different from the recommended holding period. In addition to the virtual KID, the paper version of the KID must still be issued upon request of the retail investor.

• Revision of the KID

Moreover, the Commission proposed to amend the conditions under which the KID must be updated or revised, distinguishing between PRIIP products that are still made available to retail investors and PRIIPs that are no longer made available, taking into account situations where a PRIIP product is no longer made available to retail investors.

The next step is for the Commission’s proposal to be reviewed by the EU Council and Parliament. After the text is agreed and published, the Commission suggests a period of 18 months before application of the amended rules.

You can find link to proposed regulation here

Tags:  KID / PRIIPS