7 December 2022

Latest regulatory watch (EU/UK)

A) PRIIPs latest (EU, UK)

1. ESAs finally publish ‘level 3’ Q&A

The European Supervisory Authorities (ESAs) finally delivered the first part of their ‘level 3’ PRIIPs KID guidance, barely six weeks ahead of the huge EU-UCITS transformation.

The latest Q&A document seeks to clarify their revised PRIIPs KID ‘level 2’ technical specification that will apply from 1 January 2023.

The new ‘What is this product’ section (p.9) indicates specific disclosure of actively or passively managed UCITS / AIFs, with referral to appropriate benchmarks; a key diagram links to the new Past Performance chapter (p.39), while the ESAs stress the importance of information consistent with the fund’s Investment Objectives. The ESAs also answer many new questions in relation to Performance Scenarios (p.32).

While scrutiny of this guidance continues across the industry, a reminder that at least one further PRIIPs KID Q&A will follow within a matter of weeks, covering more Performance Scenarios and Cost Calculation Methodology (Annex VI & VIII) rules which will end on 31 December 2022.


2. PRIIPs performance proxies “under scrutiny as deadline looms”

The PRIIPs KID requires funds to calculate estimated future performance scenarios by referral to ten years of previous performance history data. Funds with insufficient past performance history must instead nominate a suitable proxy to enable these additional calculations.

Morningstar recently estimated 17,023 EU-UCITS funds launched since 2012 remain in operation. This is more than half (54.3%) of the total UCITS funds figure quoted in EFAMA’s latest statistics (see C) below).

It is now reported that EU regulators are anxious of “inadequate” proxy data deployed by UCITS which will lead to “misleading performance scenarios” presented to retail investors.

Both the CSSF and Central Bank of Ireland (CBI) are preparing to closely examine the selection process and governance of suitable proxies disclosed by UCITS firm in their upcoming PRIIPs KIDs (i.e. as flagged in the ESA’s Q&A guidance).


3. UCITS notifications: still no official updates

Little time remains for the European Commission’s (EC) response to the ESA’s “urgent clarity” request covering obligatory filing of UCITS key information to home regulators (UCITS L1 art.82), before the year-end.

There are also no formal EU-level updates covering:

  • UCITS firms filing EU-PRIIPs KIDs to their host regulators (per UCITS art. 94)
  • the separate ex-ante PRIIPs notification of KIDs (per PRIIPs L1, art. 5(2)) activated by five EU NCAs.

This leaves each EEA member state to determine how local UCITS firms are to generally convert from the production and supply of the UCITS KIID to the revised PRIIPs KID (where required, from January 2023), under the supervision of their national competent authority (NCA).

However, at the time of writing, there have been no official statements from prominent NCAs, either.

We continue to share the latest available intelligence with our clients at the weekly PRIIPs Q&A session each Friday, 4pm CET. If you haven’t registered yet, click here.



B) PRIIPs latest (UK)

Latest: UK-UCITS, PRIIPs regimes

Another reminder the transition period of the Financial Conduct Authority (FCA) UK-PRIIPs regime also ends on 31 December 2022.

From 1 Jan 2023, it is mandatory for AIFs and other non-UCITS products marketed to local retail investors to produce a revised UK-PRIIPs KID.

Unlike the EU, the FCA also expect a continued supply of UCITS KIIDs from all firms marketing this product to UK investors until 31 December 2026. This includes over 8,000 EU-UCITS currently distributed into the UK per post-Brexit temporary marketing permissions regime (TMPR).

For the duration, Non-UCITS Retail Schemes (NURS) can opt to provide either a UK-PRIIPs KID or a UCITS KIID.

Despite continued discussion about local Performance Narrative information required (i.e. a key difference from the EU-PRIIPs KID model), there is no recent FCA guidance available for support.


NB: the FCA had previously cited academic research in their March 2022 policy statement conclusion that “retail investors are best able to engage with disclosures, such as narrative text, when they are presented in a way that is short, easy to understand and suitably prominent”.


C) Market trends

UCITS, AIF stakes still high ahead of Y/E deadline

Despite the recent market downturn, the stakes remain very high as the industry faces imminent re-alignment of retail fund disclosure regimes (including major divergences across the English Channel).

EFAMA’s latest data, total Net Assets related to UCITS and AIFMD regimes are as follows:

Market / Country UCITS

EUR billion


EUR billion


EUR billion

EU / EEA 9,961 6,855 16,816
United Kingdom 1,220 497 1,717
Switzerland 586 173 759
Total 11,767 6,556 18,393


Ahead of the grand PRIIPs transition, EFAMA also point to 31,373 UCITS funds currently active in the EEA.

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