According to feedback from 110 participants of a recent series of cross-industry PRIIPs workgroups held in London, Luxembourg, and Frankfurt led by KNEIP, the financial data and reporting firm, 95% per cent of top tier banks, insurers and asset managers are concerned about the nine-month period between the release of the technical standards for the PRIIPs regulation and the implementation deadline.
Earlier this month, the European Securities and Markets Authority (ESMA) released the final technical standards for the Key Investor Information Document (KID) required to market PRIIPs (Packaged Retail and Insurance Based Products) in Europe.
With these standards, the December 31st 2016 implementation deadline for the regulation gives funds nine months to prepare for the final documents.
Mario Mantrisi, senior adviser to the CEO at KNEIP said “The timeframe was a sizeable challenge from the beginning. However, with the release of the level II RTS, which varies considerably from the initial issued guidelines in several areas, the timeframe has become for many a seemingly unattainable objective.”
The feedback, which also included over 100 companies from a roadshow in Switzerland and Lichtenstein, also revealed that the ‘future performance’ testing scenario was the biggest concern for firms in the latest requirements. Around 38% of participants voted for this clause as the biggest concern, with ongoing fee disclosures being the next major issue (30%), before the calculation of risk indicators (19%) and details required around target market (13%).
Mantrisi continued: “The latest standards for the PRIIPs KID has retained the calculation of future performance scenarios, where fund managers must provide information on how the product might perform in various future circumstances. This has proven a challenge for the industry, as previously information was only required on past performance scenarios.
There is no doubt that these challenges are creating a considerable amount of head scratching for the companies that we work with on preparation for PRIIPs. However, the reality is that it is unlikely that the deadline will move. This means that in many circumstances, fund managers will have to provide this information by the end of 2016, and will benefit most now from concentrating their energy on finding pragmatic ways of doing whatever it takes to meet the deadline.”