European Parliament rejects draft PRIIPs legislation

The European Parliament has today overwhelmingly passed a resolution calling for changes to the draft PRIIPs legislation, notifying the Commission that the delegated regulation cannot enter into force.

The Commission has been asked to submit new Regulatory Technical Standards for implementing the PRIIPs regime. The revision should take account of Parliament’s concerns in order to “provide clear, comparable, understandable and non-misleading information on PRIIPs to retail investors”. 

Given the regime was due to take effect from 31 December 2016, it is difficult to see how:

• the Commission can make any changes that allow adequately for the European Parliament's concerns; and
• the industry has enough time to implement the proposed changes, all in time for the year-end.

Indeed, Parliament calls on the Commission to postpone the PRIIPs Regulation. We believe there is increasing pressure to extend this date by a further year at least, so that the regime can be brought in in a more considered manner and in a way that is likely to be more meaningful (and potentially less misleading) to consumers.

We will continue to monitor the situation and advise accordingly.