FCA chief slams Priips

Regulation, PriipsThe Packaged Retail and Insurance-based Investment Products (Priips) regulation could lead to funds withdrawing from Europe, a British regulatory chief has warned.

Andrew Bailey, chief executive of the UK’s Financial Conduct Authority (FCA), said the regulation could lead to “literally accurate disclosure” to investors without providing any context.

At a speech to London Business School Annual Asset Management Conference Bailey said: “I am concerned about Priips and I know I am not alone. There is evidence that funds, for instance from the US, are withdrawing from Europe to avoid the burden.”

He added: “I have also heard concerns about performance projections.”

Since the beginning of the year Pripps manufacturers have been required to publish a Key Information Document (KID), which must be accurate, fair, clear and not misleading, for each of their Priips, detailing risks, performance scenarios and costs.

Bailey’s remarks increase the pressure to review the regulation. In January the FCA was warned of “serious flaws” in KIDs by the boards of some of Baillie Gifford’s independent trust clients.

Later that month the UK’s Investment Association also called for an “urgent early review” of KIDs.

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