The FCA has published a Consultation on their PRIIPS scope rules and amendments to the UK Regulatory Technical Standards (RTS).
Open for comment until 30 September 2021, the FCA now intend to proceed with their newly acquired powers to amend the local PRIIPS regime (for UK retail investors) where they see fit. Key proposals include amending the UK-PRIIPs KID RTS to:
- Replace EEA-KID performance scenarios methodologies & presentation with a performance information narrative in the UK-KID
- Address the potential for some PRIIPs to be assigned an inappropriately low summary risk indicator in the UK-KID;
- Address concerns pertaining certain applications of the slippage methodology when calculating transaction costs.
The FCA: “currently intend these changes to come into effect from 01 January 2022”.
They also state that: “EU and EEA manufacturers and distributors which currently manufacture and market PRIIPs into the UK and wish to continue operating in the UK will be subject to the PRIIPs Regulation as amended by domestic legislation. We intend that our amendments and rules will apply to those firms in the same way that they apply to UK businesses.”
Should they proceed accordingly, this would create a UK-PRIIPS regime divergencecompared to the EEA equivalent in less than six months time (i.e. in advance of the EC’s re-scheduled PRIIPS KID upgrade provisionally re-scheduled for July 2022).
A reminder also that the UK PRIIPS regime (unlike the EEA equivalent) will exclude UCITS funds from KID disclosure until 31 December 2026.
Elsewhere, the FCA canvas opinion on their introduction of interpretative guidance to clarify what it means for a PRIIP to be ‘made available’ to retail investors, while presenting rules to clarify the scope of the corporate bonds.
More details to follow.