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REGULATORY UPDATES – PRIIPS FOCUS FEBRUARY 2016
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FCA HIGHLIGHTS PRIIPS AS THEIR “HOT TOPIC” IN JANUARY REGULATION ROUND-UP
Packaged Retail Investment and Insurance Products (PRIIPs) are now high up on the agenda for the Financial Conduct Authority (FCA) as they continue to pursue their objectives of implementing EU policy throughout 2016. In their January issue of Regulation Round-up, the FCA highlighted PRIIPs as their “hot topic” and urged firms involved in manufacturing, selling or advising on PRIIPs to ensure they understand the changes before the implementation date of 31 December 2016.
The FCA also highlighted that later this year they will consult on amendments to disclosure requirements in the Handbook to include the introduction of the PRIIPs Regulation.
Following the FCA’s recent discussion paper on “Smarter Consumer Communications”, the FCA sets out expectations that firms understand and recognise the importance of communicating effectively with consumers. As it relates to PRIIPs, the Key Information Document (KID) should be designed to be engaging for retail investors, and to help them better comprehend and compare the many different products that fall within the scope of the PRIIPs regulation.
The new PRIIPs regulation represents a major challenge for manufacturers and distributors of financial products across the banking, insurance and asset management industries. The new documents will be costly and time-consuming to create, and any inaccurate, out-dated or misleading information could lead to non-compliance.
EUROPEAN SUPERVISORY AUTHORITIES ARE ONE STEP CLOSER TO FINAL TECHNICAL STANDARDS FOR PRIIPS
As the consultation period on the draft Regulatory Technical Standards (RTS) closed on the 29th January, it is time
for the European Supervisory Authorities (ESAs) to take the responses by the various stakeholders on board and decide how to update the draft RTS accordingly. We expect the ESAs to submit a final set of the draft RTS on the content, presentation and calculation of information on the PRIIPs KID to the European Commission. The RTS should be adopted by the European Commission within the following months. Regulation will begin to apply from 31 December, 2016.
Based upon the timeline outlined above, there is a very short timeframe for implementation of the PRIIPs regulation by those within the banking, asset management and insurance sectors. Therefore, steps should be taken now to begin preparing for the PRIIPs KID implementation.
Final draft RTS released by ESAs 31st March 2016
Adoption of final RTS by EC early summer
Application of PRIIPs Regulation 31st December 2016
“It's important that all firms who
manufacture, sell or advise on PRIIPs
understand what the changes mean
for them before the implementation
date of 31 December 2016.”
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BE PREPARED FOR THE CHANGE
To aid in the planning and preparation for the PRIIPs implementation, RR Donnelley is providing you with the following 3-step guidance:
1. KEY QUESTIONS TO ASSESS THE IMPACT OF PRIIPS ON YOUR ORGANISATION
How many PRIIPs KIDs do you have?
Do you have the required data and who will manage it?
Have you addressed the gaps between UCITS and PRIIPs data?
Will you require translations?
Who will approve the PRIIPs KIDs?
Do you know where the KIDs need to go?
How will you transfer data to your Insurance and Banking sales channels?
Do you have a process to publish PRIIPs, should investment strategies change?
Are you resourced adequately for annual production and BAU?
As data volume increases, have you thought about process automation?
2. PRIIPS KID WHITEPAPER: THE QUEST TO RE-CREATE THE KID
Visit our website to download a white paper which will:
Explain the history and background to the new rules.
Set out the requirements and show what products and services are
affected.
Show the timeframe for implementation.
Discuss the challenges that manufacturers and distributors of
financial products will need to overcome.
Make recommendations for action that will help to minimise the
manual processes, lengthy data gathering and lack of automation in
place at some financial institutions.
3. ASSET MANAGERS WITH INSURANCE CLIENTS – WARNING ON EARLY PRIIPS DATA REQUESTS
The PRIIPs regulation states that UCITS KID will be subject to a grandfathering period up until 31st December
2019. However, asset managers will need to consider the gathering of new UCITS data to feed into the products of their insurance clients who wrap UCITS as underlying funds within their insurance-based investment products. The insurance firms will require this information in order to comply with the PRIIPs regulation.
Asset management firms will have to consider the need to gather, process, quality approve, and deliver this information in a timely manner to their insurance clients.
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PRIIPS KID SERVICES FROM RR DONNELLEY
For further information on European regulations, please contact our Regulatory Solutions Manager:
Patricia Myles
Tel +44 203 047 6562
www.FinancialEMEA.rrd.com
RR Donnelley (Nasdaq:RRD) helps organisations communicate more effectively by working to create, manage, produce, distribute and process content on behalf of
our customers. The company assists customers in developing and executing multichannel communication strategies that engage audiences, reduce costs, drive
revenues and increase compliance. RR Donnelley’s innovative technologies enhance digital and print communications to deliver integrated messages across
multiple media to highly targeted audiences at optimal times for clients in virtually every private and public sector. Strategically located operations provide local
service and responsiveness while leveraging the economic, geographic and technological advantages of a global organisation.
__________________________________________________________________________________________________________________
LONDON
John McCann
Tel +44 203 047 6187
DUBLIN
Robert McNamara
Tel +353 1 818 9971
This regulatory update is for general information purposes only and RR Donnelley does not provide financial advice.
