The Economic and Monetary Committee (ECON) rejected as flawed and misleading proposals by the European Commission aimed at providing greater protection to consumers buying packaged retail and insurance-based investment products (PRIIPs). The Commission’s proposals set the regulatory technical standards (RTS) which service providers would have to meet to provide greater transparency about PRIIPs and clearer information to investors, and which RTS are designed to accompany the PRIIPs regulation (Regulation (EU) No 1286/2014). Much of ECON’s opposition centres on the Key Investment Document (KID) which is meant to provide consumers with information about the features, risks and costs of an investment product; the proposed KID rules were described as containing overly generic statements which are not conducive to investor protection as well as defective formulas and predictive analyses that risk misleading investors.
The measures will now be put to a full plenary vote in September and Parliament must now either support or reject the notion. If a revision of KID rules happens, this may delay the implementation of the PRIIPs regulation by the prescribed deadline of 31 December 2016.
The full Press Release issued by the European Parliament can be read here.