The rejection of the ‘Priips’ retail investment regulations has been welcomed and one regulatory-watcher says a delay of a year could follow.
The European Parliament’s committee on economic and monetary affairs last week rejected the regulatory technical standards for Priips – or the Packaged Retail and Insurance-based Investment Products regulations – which may reduce the chance of the rules coming into effect at the start of 2017.
John Dowdall, managing director of Silverfinch, a regulatory technology firm, said: “The delay to the implementation of Priips is something that the retail sector, investment managers, and manufacturers will welcome as an honest realisation that what had been set out was inadequate.”
The delay means there is “little chance” of the Priips rules coming into effect at the start of 2017. Instead, they are likely to be delayed by as much as a year, Dowdall said.
He added that “many in the industry” had feared that the short timeframe between now and January meant that manufacturers would reduce the number of investments on offer due to the data collection burden.
“The extended timeframe will hopefully allow those who were in that situation to keep a full range of products,” Dowdall added.
Andrew Glessing, head of compliance and regulation at asset management consultancy Alpha FMC, said: “With any piece of incoming regulation, it is crucial to regulated firms that the surrounding legislation is clear, accurate and can be relied on to work in practice.
“Concerns have been raised, from asset managers to insurers, that Priips legislation and new-style KIDs [key investor documents] would not enhance investor communication as envisaged.”
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