PRIIPS – a minor update for the EU and UK regimes

PRIIPS in the EU

It'll come as a surprise to no one but it's still nice to have it confirmed formally - the changes to the PRIIPS KID level 2 measures will come into effect on 1 January 2023.

A new Delegated Regulation was published in the Official Journal on 24 June 2022, making two changes:

• it amends the Delegated Regulation (which itself amended the PRIIPS KID Delegated Regulation) so changes to the Level 2 measures will now apply from 1 January 2023 rather than 1 July 2022 and

• it amends the PRIIPS KID Delegated Regulation directly so the transitional arrangement laid down in Article 14(2) is extended from 30 June 2022 to 31 December 2022.

The upshot of this is that, from 1 January 2023:

• the amended PRIIPS Level 2 rules will apply

• the UCITS exemption will end

• the Article 14(2) exemption (see below) will end and

• Member States must allow provision of a PRIIPs KID to comply with the requirement to provide a UCITS KIID.

Article 14(2) allows PRIIPS manufacturers to continue to use the UCITS KIID to provide specific information for the purposes of disclosures relating to PRIIPs offering a range of options for investment.

Because the new Delegated Regulation doesn't formally come into force until 14 July 2022 (i.e., after the Article 14(2) extension was due to have ended), the European Commission has published a statement underlining that the clear intention of the new rules is to align all the dates and noting that NCAs should take this into account "when discharging their supervisory tasks".

PRIIPS in the UK

In the meantime, in the UK the FCA has published a Handbook Instrument which makes some minor changes to Annex VI (Methodology for the calculation of costs) of its PRIIPS RTS rules regarding (a) the treatment of anti-dilution mechanisms, (b) the summary cost indicator and (c) the compound effect of costs for all types of PRIIPS.