14 September 2016

EFAMA welcomes adoption of Parliament Plenary Motion for a Resolution on key information documents for PRIIPs rejecting the draft RTSs

EFAMA welcomed the adoption of the European Parliament Motion for a Resolution on the Commission Delegated Regulation on key information documents for PRIIPs, which objects to the Commission delegated regulation and calls for a postponement of the application date of the PRIIPs Regulation.

The European Fund and Asset Management Association (EFAMA) firmly believes that the PRIIPs KID is a powerful instrument to ensure that consumers receive the right information before making their investment choices. Asset managers know how important it is that investors and their advisers are given meaningful, comprehensible and comparable information to make sound investment decisions. It is therefore crucial to get the PRIIP KID right the first time around to ensure consumers find it helpful before making their investment choices.

Asset managers have long argued that the draft RTSs, as endorsed by the European Commission, will not achieve the intended objective to make the KID helpful to consumers. They will at best confuse investors, at worst mislead them.

The European asset management industry is absolutely convinced that the RTSs must be amended in a satisfactory way to serve their purpose for consumers. They need to be amended to solve flaws – and the key ones are allowing past performance so the investor can see if the asset manager has met its objectives in the past, and fixing the inaccurate calculation methodology of transaction costs. Investors must have the basic facts of what their investment will bring in terms of risks and costs. This is fundamental in terms of trust and confidence from consumers.

Peter De Proft, EFAMA Director General, commented: "We want to be crystal clear. EFAMA would not like to reopen discussions on the PRIIPs Level 1 Regulation, save for a postponement of the Regulation's application date. What is crucial now is to get the Level 2 right - and this means appropriately amending the draft RTSs, while leaving untouched the letter and spirit of the Level 1 Regulation."

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