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UK PRIIPs Regulation - HM Treasury publishes Policy Statement on amendments - July 2020

HM Treasury has published a Policy Statement setting out proposed amendments to the onshored version of the the Packaged Retail and Insurance-Based Investment Products Regulation (1286/2014/EU) (UK PRIIPs Regulation). The changes “target the most pressing concerns with the PRIIPs Regulation and are intended to ensure that UK retail investors are provided with more appropriate PRIIPs disclosures”. 

HM Treasury proposes several amendments, including:

• a change that enables the FCA to clarify the scope of the PRIIPs Regulation through its own rules in order to address existing, and potentially future, uncertainties in relation to certain types of investment product, such as corporate bonds. The FCA does not propose to amend the definition of a PRIIP;
• an amendment to replace the term “performance scenario” with “appropriate information on performance” to allow the FCA to clarify the information that is to be included in a key information document (KID). It is noted that the existing methodology for calculating performance scenarios has been criticised for producing misleading results; and
• an amendment delegating power to HM Treasury to further extend the exemption for UCITS for up to five years. This will enable HM Treasury to consider the appropriate timing for the transition of UCITS funds into any domestic successor and amend the exemption date accordingly.

HM Treasury intends to legislate for these amendments when parliamentary time allows. In the longer term, there will be a wholesale review of the disclosure regime for UK retail investors, including the harmonisation of the PRIIPs regime with requirements in the Markets in Financial Instruments Directive (2014/65/EU) (MiFID II).

HM Treasury Policy Statement on amendments to the UK PRIIPs Regulation

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Please see the Banking and Finance section below for an item on a PRA Consultation Paper regarding the implementation of aspects of CRD V.