Insurance Europe — alongside several other financial sector associations — raised serious concerns in response to a consultation conducted by the European Commission on planned changes to the Packaged Retail and Insurance-based Investment Products (PRIIPs) framework.
The Commission has recently adopted amendments to the PRIIPs Regulation and the Undertakings for Collective Investment in Transferable Securities (UCITS) Directive. However, in contrast to earlier plans, it has postponed the adoption of the revised Regulatory Technical Standards (RTS) to 7 September 2021.
Despite this fragmented process, the Commission intends to maintain 1 July 2022 as the date that both the new Level 1 and Level 2 requirements apply to product manufacturers, which would leave them with too short a period to implement the new rules.
Implementing these changes involves numerous departments and competences to interpret the new requirements, gather new data, properly plan and make changes to IT, and to adapt training for staff and distributors. It also requires extensive dialogue between insurers and many stakeholders, such as asset managers when they are UCITS providers.
The Commission’s too short implementation timeframe could therefore lead to significant challenges with implementation and even force operators to suspend the distribution of certain products, which would be detrimental to consumers’ participation in the capital markets.
Therefore, to ensure an orderly implementation, the financial sector associations called for a 12-month implementation period beginning after the adoption of the RTS by the College of Commissioners, as this is the minimum time needed for all products and all market participants. A reasonable, synchronised application date for both the Level 1 and Level 2 amendments will be key.
The other signatories were the European Association of Co-operative Banks (EACB), European Association of Public Banks (EAPB), the European Banking Federation (EBF), the European Fund and Asset Manager Association (EFAMA), the European Savings and Retail Banking Group (ESBG) and the European Structured Investment Products Association (EUSIPA).