The Investment Association says it supports the rejection of technical standards for the implementation of Priips’ Key Information Document (KID) by an overwhelming majority of members in the European Parliament this week.
The UK industry body has also argued the European Commission now needs to produce KID requirements that will “give consumers the information they need to make informed investment choices.”
An overwhelming 602 parliamentarians voted in favour of the rejection, while only four voted for the standards to be passed in their current state.
Retail markets specialist at the Investment Association Florian van Megen says: “The proposed rules would have led to extremely flawed and misleading retail investor disclosure.
“We would urge the Commission to amend the presentation of costs and charges and improve the performance disclosure by adding historic performance alongside future scenarios.
Van Megen says, even though past performance is not a guide to future performance, it would be risky for consumers to be unable to see the historic delivery of a product.
“Although we do not disagree with the inclusion of future performance scenarios, we do not believe these should be given in isolation. Only past performance reliably shows the investment experience and a manager’s track record.”
Van Megen says attempts to establish comprehensive costs and charges disclosure were based on “assumptions rather than real delivery”.
“Not only could it mislead investors by not showing what they will actually pay but it also makes the comparison of different products impossible.”