The European Commission has announced that it will launch the legal steps to postpone the PRIIPs regulation for 12 months. Parliament and Council now have a month to ensure the new regulation passes through the ordinary co-legislative procedure in time to formally delay the regulation until 31 December 2017. The announcement also realigns the PRIIPs timetable with MiFID II, meaning that firms will need to approach both regulations in the same time frame.
The delay will only be formalized if the new Level 1 law is adopted by the European Parliament and European Council within the next month, as new laws must be published in the official journal of the EU at least 20 days before they can enter in force. Given that neither Parliament nor the Council have previously requested amendments to the Level 1 law, it would be expected that both institutions expedite the amendment’s progress through the legislative process within the next month. Assuming that both bodies respond swiftly to the proposal, the new date of application will be 31 December 2017, meaning that PRIIPs will apply simultaneously with MiFID II. Otherwise, the original Level 1 law will enter in force on 31 December 2016 without supporting Level 2 technical standards. As a further step, the European Commission has stated that it will now work with the three European Supervisory Authorities (ESAs) to resubmit the revised Level 2 Regulatory Technical Standards (RTS). In particular, it has requested the ESAs to make targeted changes in certain areas (i.e. multi-option products, performance scenarios, comprehension alert and presentation of insurance related costs).
Phil Lynch, Head Markets, Products & Strategy at SIX Financial Information said, “More clarity about the PRIIPs implementation timetable is welcome news to the industry. However, there is still a lot for the financial industry to do as they prepare for PRIIPs and MiFID II simultaneously. With the timetables for both regulations now realigned and the fact that many aspects overlap, firms have the opportunity to look at compliance projects more strategically. SIX supports this approach with an industry utility that has been expressly designed to accommodate the long-term obligations of investor protection legislation. The flexible system allows SIX to contribute to the compliance value chain by offering key aspects of the connectivity and entitlements that will be required for compliance across a range of investor protection regulations now and in the future.”