The main issue lies with the PRIPs factsheets and our website.
In a recent turn of events, the European fund industry is facing a new challenge as the delay in the adoption of the Regulatory Technical Standards (RTS) under the PRIIPs regulation threatens to create a congestion at the EU level. This development comes after the European Commission initially planned to postpone the application of the PRIIPs regulation for retail funds by half a year, moving the start date from January 1 to July 1, 2022.
The PRIIPs regulation, which has been in effect across Europe since the beginning of 2018, initially only applied to capital-forming insurances and derivatives, for which there were no standardized European information obligations beforehand. However, in 2020, retail funds, such as UCITS funds and AIFs, were originally supposed to follow the PRIIPs regulation, but were given two more years, until January 1, 2021, and this deadline has now been extended by half a year, to July 1, 2022.
The regulation requires new rules for reporting updates and reviews of an investment product, physical length of the document, performance measurement, risk calculation, and cost and fee presentation. The regulatory authorities Eba, Esma, and Eiopa have been working on urgently needed reforms to PRIIPs-KIDs for months, but could not agree on a common line. In February, they finally agreed unanimously on an amendment proposal.
However, even this extended deadline is now in jeopardy due to the delay in the availability of RTS. As of the latest information in 2025, no key information document (KID) fully meeting the PRIIPs Regulation requirements for retail investors in the European Economic Area (EEA) is generally prepared or finalized for certain notes or products. This means that offering or selling such products to retail investors in the EEA may be unlawful under the PRIIPs Regulation.
The delay in the RTS puts fund houses back under time pressure, leaving them with only nine months from the end of September 2021 to the end of June 2022 to convert their fund information to PRIIPs. Many fund houses are struggling with the switch to PRIIPs due to the additional data required. The target audience for PRIIPs sheets is private investors, unlike Ucits information which was for both private and professional investors.
The situation has left some companies in a precarious position. One in eight companies feared they would not meet the end-of-year deadline as of March, and at least 38 percent of providers had not started creating PRIIPs information sheets. The German Fund Association BVI is displeased with the situation and is calling for a further delay, suggesting the start of the PRIIPs rules for retail funds should be January 1, 2023.
Despite the challenges, the Finnish Financial Supervisory Authority (FIN-FSA) has decided not to extend its recommendation on some regulatory distributions beyond 30 September 2021, suggesting that at least some regulatory timelines were upheld without extension. Retail fund distributors must comply carefully with existing PRIIPs requirements to avoid unlawful sales to retail investors in the EEA.
In light of these challenges, it remains to be seen whether the fund companies will have to bear the delay or receive another extension. The outcome is uncertain, but one thing is clear: the PRIIPs RTS for retail funds continues to face implementation challenges, with unresolved KID requirements affecting retail product offerings.
- The delay in the availability of the Regulatory Technical Standards (RTS) under the PRIIPs regulation is causing a predicament for the European fund industry, as it leaves fund houses with only nine months from the end of September 2021 to the end of June 2022 to convert their fund information to PRIIPs, putting them under immense pressure to meet the extended deadline.
- The complexities around the PRIIPs regulation, including the requirement for new rules for reporting updates, physical lengths of documents, performance measurement, risk calculation, and cost and fee presentation, coupled with the delay in the RTS, have created a significant challenge in the business and investment spheres, necessitating careful compliance from retail fund distributors to prevent any potential violations of the PRIIPs Regulation.
- With the PRIIPs RTS for retail funds continuing to face implementation challenges, and unresolved key information document (KID) requirements affecting retail product offerings, it has become a part of the general news and politics discourse, with policy-and-legislation discussions focusing on potential revisions or extensions to ensure the smooth adoption of these regulatory measures.
