EFAMA, the European fund management group, has called for a delay of “at least one calendar year” in the implementation of the requirement for fund managers to produce PRIIP Key Information Documents (KIDs), in order to “allow for proper implementation” of the new rules.
In a statement, the Brussels-based European Fund and Asset Management Association stressed that it was supportive of the general objectives of the PRIIP KID regulation, but concerned “about the very limited time that product manufacturers will have” between the publication of the final technical rules and guidelines and the deadline to produce KIDs, which currently is 31 December of this year.
“Having provided extensive feedback throughout the ongoing Level-2 work, we seriously doubt there will be enough time for market participants to implement the final rules by the end of this year, as originally foreseen by the co-legislators,” the organisation said in a policy document, seen by International Investment.
“EFAMA therefore recommends that the European Commission, European Parliament and Council delay the entry of application of the PRIIP KID Regulation by at least one calendar year.”
As reported, the European Commission last week announced a year’s delay in the implementation of the revised Markets in Financial Instruments Directive, or MiFID II. Authorities and market participants now have until 3 January 2018 to comply with the new MiFID rules.
According to EFAMA, the business of developing technical standards for the PRIIPs KID ended up being a “complex project”, which ultimately involved “several iterations of highly technical consultations.
The organisation noted that a number of fundamental questions even now “still remain unanswered, at this late stage, including the calculation of the transaction costs, while others possibly require additional guidance at Level-3.
“In the best-case scenario, the final RTS [final technical rules] will be published in the EU Official Journal in Q3 2016, leaving only a few months for the industry to create a huge number of KIDs,” it went on, explaining the thinking behind a call for a year’s delay.
“Our experience with the UCITS KIID showed that one calendar year was clearly needed after the finalisation of the technical standards.”