The letter points out that under the current regime, retail investors will receive two types of Key Information Documents (KID) – the documents that are to be provided to consumers before purchasing a PRIIP - as of 1 January 2020. The letter states this “is not satisfactory, and risks under-mining the aims of the PRIIPs Regulation". It also highlights that overlapping disclosure documents could deter investors rather than facilitate informed investment decision-making. The European Supervisory Authorities have urged the European Commission to bring forward solutions, including legislative changes, to resolve this situation.
EFAMA fully supports the ESA's timely intervention and calls for action prior to the review of the PRIIPs legislation, now expected to be delayed. This is in line with the concerns EFAMA previously raised around certain features and rules of the PRIIPs legislation and the harmful impact it could have on investors and consumers.
EFAMA believes that if the PRIIPs review is delayed, the UCITS exemption should be postponed accordingly to ensure investors do not receive confusing and misleading information in the mean-time. It strongly believes it would be counterproductive for the European Commission to replace the UCITS KID by the PRIIPs KID before a comprehensive review and thorough consumer testing have been conducted on PRIIPs. Failure to do so would have negative consequences for retail investors.
EFAMA believes that only when conducting the PRIIPs review should the Commission assess the future of the UCITS exemption, as is mandated in the law.
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