PRIIPs QA updated by ESA now include PRIIPs 2.0 recommendations

On November 142022, the European Supervisory Authorities (ESA) published an updated version of the Questions and Answers (Q&As) on the PRIIPs Key Information Document. This includes new Level 3 PRIIP regulatory updates related to the EU PRIIPs RTS 2.0 amendments introduced in Commission Delegated Regulation (EU) 2021/2268, which will apply from January 1, 2023.

The new Q&A document content contains guidelines that refer both to the new EEU) 2021/2268 RTS, as well as the existing (old) RTS – (EU) 2017/653. A revision before 1January 2023 is, however, targeted to update sections which may not be relevant anymore past this date.

As the new PRIIPs RTS 2.0 requirements’ main focus is the KIDs for UCITS and AIFs, it is not surprising that the ESA new guidelines add clarifications mainly in relation to application of the new RTS for this category of PRIIPs.

Asset managers can find extensive details and clarifications in relation to all new requirements for the KID in the context of UCITS and AIFs:

• Clarification in relation of the “What is this product?” section disclosure requirements for funds
• Calculation requirements in relation to point 7 of Annex IV, as well as the referenced “linear transformation” have now been better clarified
• Explanations to the calculation requirements in relation to the fund historical data, as well as usage of benchmarks and proxies for the calculation of SRI and scenarios
• Clarifications in relation on the monthly calculation basis and publication requirements for “previous performance scenario calculation”
• Extensive details on the Past performance requirements, introduced by the new Annex VIII
• Clarifications in context of specific types of investment funds, e.g. umbrellas, multi-share class, etc.
• A few clarifications in relation to the application of the new requirements, in context of Insurance products are also present.
• Presentation of costs, e.g. under Cost composition

For derivative manufacturers like structured products and OTCs manufacturers, there are less new clarifications:

• An important note is made in relation to the new Autocall disclosure format in context of calculation of scenario returns and costs
• Presentation of costs, e.g. under Cost composition
• A performance scenario table example for CFDs, which may be of interest also in the context of other derivative-based products providing leverage

cleversoft Regulatory Watch team is analyzing all new details to ensure that our PRIIP services are fully compliant as of January 12023. If you are interested in learning more about the cleversoft PRIIP services or in case you have any questions about them, please do not hesitate to contact us.