Parliament vote means it’s “time for action” over Priips rules

European_ParliamentMore industry bodies have welcomed the European Parliament’s recommendation to extend the review of the ‘Priips’ investment fund rules.

The Investment Association (IA) said it was now time for action over the methodologies used in the regulation that critics say could lead to inaccurate information for retail fund buyers.

The Parliament’s Committee on Economic and Monetary Affairs (Econ) passed a draft resolution earlier this week to extend two deadlines relating to the implementation of the Priips – the Packaged Retail and Insurance-based Investment Products – regulation.

Jonathan Lipkin, director of policy, strategy and research at the IA said he was pleased the Parliament had decided to extend the time available to review Priips key investor documents (KIDs) and had extended the period of exemption for compliance with Priips by funds regulated under the older Ucits Directive.

“Regulators now have the opportunity to address the flawed methodologies of Priips which are having harmful consequences on consumers’ ability to save confidently. We have offered pragmatic solutions and it is now time for action,” Lipkin said.

The IA, Germany’s BVI funds trade body, and the European Fund and Asset Management Association (Efama) have all objected to methodologies that were planned to be used in Priips KIDs to calculate performance and transaction costs.

Efama said the two-year extension of the exemption for Ucits funds to have to publish KIDs, rather than their existing information documents, constituted “an acknowledgement that Priips KID currently presents flaws that need to be corrected in an appropriate manner”.

Efama also welcomed an Econ vote that confirmed amendments to European Commission proposals affecting alternative investment funds. These included an extension to defining the “premarketing” regime for established EU alternative funds. The Commission and the Council of the European Union had disagreed over certain details, such as whether it was possible to pre-market – such as through roadshows – an alternative investment fund that was already established.

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