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ESAs Publish Final Report on Amendments to the PRIIPs Key Information Document

On February 8, the Joint Committee of European Supervisory Authorities (ESAs) published a final report on proposed amendments to Commission Delegated Regulation (EU) 2017/653 (Delegated Regulation) on key information documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs).

The ESAs originally consulted on the proposals in a consultation paper issued in November 2018, proposing amendments that would allow the KID to be applied to all types of investment funds (including undertakings for collective investments in transferable securities (UCITS)), as well as amendments designed to resolve perceived issues concerning performance scenarios.

The ESAs state in the final report that, having reviewed the feedback on the consultation, stakeholders did not support the proposed amendments. In the meantime, the European Parliament and Council have also been discussing deferring the application of the KID by UCITS and certain non-UCITS funds until December 31, 2021. In light of the above, the ESAs have decided not to propose substantive amendments to the Delegated Regulation at this time.

Instead, the ESAs have begun work to provide input to a review of the Delegated Regulation during 2019. The final report sets out how the ESAs plan to conduct this work and discusses the next steps that the ESAs intend to take.

At the same time, the ESAs also believe that an immediate supervisory response is needed in relation to the issues discussed in the consultation paper concerning performance scenarios. The ESAs consider that there is a risk that retail investors may have developed inappropriate expectations about the possible returns they may receive. Therefore, the ESAs recommend that PRIIP manufacturers include a warning in KIDs to ensure that retail investors are fully aware of the limitations of the figures provided in the performance scenarios.

The final report is available here.

The joint supervisory statement is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume IX, Number 46


About this Author

John Ahern, Financial Attorney, London, Katten Law Firm

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...