Digital Advisory & Compliance, Regulatory Watch, Regulatory WatchSFDR Reform Advances: The European Parliament Publishes Its Position on SFDR 2.0
As the industry prepares for the approaching transition towards the UK Consumer Composite Investments framework, the EU is advancing its own updates to the PRIIPs regime. In December 2025 the European Parliament and Council reached a political agreement on the revision of the Packaged Retail and Insurance-Based Investment Products Regulation under the EU Retail Investment Strategy.
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As the industry prepares for the approaching transition towards the UK Consumer Composite Investments framework, the EU is advancing its own updates to the PRIIPs regime. In December 2025 the European Parliament and Council reached a political agreement on the revision of the Packaged Retail and Insurance-Based Investment Products Regulation under the EU Retail Investment Strategy.
The PRIIPs Regulation, in force since 2018, has long been associated with challenges relating to optimistic performance scenarios, complex transaction cost methodologies, and the operational difficulties created by parallel disclosure regimes between PRIIPs and UCITS. The Retail Investment Strategy, published in 2023, aims to create a more harmonised and effective consumer protection framework across all retail investment products.
The Council’s December 2025 press release confirms that the updated framework improves standardised information, in particular the PRIIPs KID. Firms will need to adopt updated templates developed by the ESAs, providing clearer information on costs, risks, and expected returns for retail investors. The press release also confirms that 30 months after the entry into force of the new PRIIPs rules, all KIDs will need to be provided in a machine readable format to support digital comparison and modern information access for consumers.
These elements provide essential clarity on how the PRIIPs KID will evolve not only in content but also in digital usability, which is increasingly important as firms expand investor‑facing digital channels.
Key Changes at a Glance
Updated KID structure and templates
The revision introduces a more intuitive layout and updated templates that will be developed by the ESAs. The goal is to ensure consistency in the presentation of costs, risks, and performance information across retail investment products, aligning with the Retail Investment Strategy focus on more visible and accessible disclosures.
Industry impact: Manufacturers and distributors will need to adapt document production processes and ensure that the new templates can be generated consistently across product families.
Changes to performance scenarios
The revised methodology will address long standing concerns about overly optimistic projections and will aim to deliver more realistic outcomes, especially under stressed market conditions.
Industry impact: Firms will need to update scenario modelling, data sourcing, and governance frameworks.
Revised transaction cost methodology
Adjustments will improve comparability and reduce distortive effects related to outlier events.
Industry impact: Recalibration of cost models and potential changes to data feeds will be required.
Machine readable KID requirement
The Council press release confirms that 30 months after the new PRIIPs rules enter into force, KIDs will need to be provided in a machine readable format to support digital comparability.
Industry impact: This will require significant system upgrades, especially for firms currently focused on PDF only delivery.
Digital disclosures and alignment with UCITS transition
Digital formats will be allowed for layered disclosures and the UCITS exemption from PRIIPs will be phased out.
Industry impact: UCITS managers will require structured migration plans and technology updates to support digital and print aligned formats.
Timeline
What has happened so far
- Publication of the Retail Investment Strategy (2023)
- Proposal for PRIIPs amendments
- Council mandate for trilogue negotiations (2024)
- Council and Parliament political agreement on the Retail Investment Strategy, confirming updated KID templates and machine readable obligations (December 2025)
Upcoming milestones
- Finalisation of legal texts associated with the Retail Investment Strategy following the political agreement in early 2026, by the Council and Parliamant technical team
- Publication in the Official Journal
- ESAs development and approval of revised RTS
- Application of new PRIIPs rules 18 months after publication
- Mandatory machine readable KIDs 30 months after entry into force
cleversoft Services
At cleversoft, we support clients through the complete lifecycle of PRIIPs KID production and maintenance. Services include data sourcing, scenario and cost calculations, multilingual document generation, and digital disclosure solutions. We also provide structured migration support for UCITS managers transitioning to PRIIPs.
Our Regulatory Watch follows all developments. As part of our compliance commitment, we are happy to offer our customers continuously evolving regulatory services that take into account regulatory changes and new disclosure requirements.
Further information on our KID Compliance Services can be found on our website. If you have any questions, please contact our team of experts via the web form.