Timeline for implementation

The European Parliament rejects the final draft RTS

On 14th September 2016, the full European Parliament voted at its plenary session in Strasbourg to reject the Commission’s RTS on PRIIPs.

The European Parliament, in its resolution:

• objected to the Commission’s RTS
• instructed its President to forward the resolution to the Commission and to notify the Commission that the RTS cannot enter into force
• called on the Commission to submit a new delegated act which takes account of the concerns in the resolution
• called on the Commission to consider a proposal postponing the application date of the PRIIPs Regulation to ensure a smooth implementation of the requirements set out in the Regulation and the delegated regulation, and avoid the application of the PRIIPs Regulation without the RTS being in force in advance, and
• instructed its President to forward the resolution to the Council and to the governments and parliaments of the Member States.
  It now remains to be seen what action will be taken by the European Commission and whether the implementation date of the PRIIPs Regulation will be delayed or whether the Commission will submit a new RTS quickly to address the concerns set out in the resolution. If the PRIIPs Regulation is not delayed and applies from 31 December 2016 without the RTS being in force, this will lead to huge uncertainty in how the provisions of the PRIIPs Regulation should be interpreted and applied.

European Commission delays PRIIPs Regulation

On 09 November 2016, the European Commission announced a 12 month delay to the PRIIPs Regulation, which was passed into law on 24 Decemeber 2016 and will come into force on 01 January 2018.

This decision comes after months of debate, culminating in the vote from the European Parliament to reject the current regulatory technical standards. A 12 month delay to the PRIIPs Regulation was supported by many in the industry and most of the EU member states, including the UK, France, Germany and Ireland.

This delay will bring the implementation date of the PRIIPs Regulation in line with that of MiFID2 (which in itself eliminates certain issues such as how to interpret the definition of retail investor in PRIIPs which cross-refers to the MiFID2 definition) and provide much needed time for firms to implement the regime and consider further the significant number of open issues that have been raised by the industry.