Experts have warned that the investment industry faces entering a “holding pattern” over Priips rules as European legislators come under pressure to redraft the regulations ahead of new deadlines.
Last week, the European Parliament agreed to delay Priips by one year to January 2018 by siding with the European Council and the EU Commission’s proposition on 9 November.
The European supervisory authorities now have six weeks to rewrite some of the standards within the legislation before opening a consultation on the changes, with subsequent scrutiny coming from the Parliament and Council. The Commission expects the final framework to be in place by the end of the first half of 2017.
Brown Brother Harriman Fund Administration Services senior vice president Sean Tuffy says the ESAs and Commission will be keen to keep the changes to a minimum.
But he says: “Part of the reticence by the Commission to delay the implementation was concern that there would be lobbying for wholesale changes to Priips.
“This work by the ESAs and the Commission leaves the industry in a bit of a holding pattern and will probably lead a very tight turnaround to implement final Priips solutions.”
KPMG investment management and regulatory change director Julie Patterson says there is “a heightened risk” the regulatory technical standards changes could become a political issue with a greater threat of rushing the change and “missing the point” of it.
Uncertainty around the deadline will continue, adds Wealth Management Association deputy chief executive John Barrass, but he is hopeful providers will have enough time to adapt.
Barrass says: “This is a process, not just a rewrite. We expect a reasonably substantial and comprehensive rewrite if enough attention is made to the criticism, especially on the inclusion of past performance data in key information documents.”