EBF Response to the joint call for evidence on the European Commission mandate regarding the PRIIPS regulation

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Brussels, 16 December – The EBF welcomes the opportunity to respond to the ESAs  Call for evidence regarding PRIIPs Call for evidence regarding PRIIPs and would like to make the following general comments:

Regarding scope: The EBF does not support an extension of the scope of PRIIPS. Some precisions should rather be given on the current scope, notably making the point that b Derivatives which are used for mitigating risk (hedging) are actually out of scope.

Regarding the creation of a taxonomy in PRIIPS: EBF does not support the creation of a taxonomy as we believe in practice there is a risk exists that, for example, a specific new product does not properly fit the prescribed categories and may generating confusion for manufacturers as well as preventing them from offering products in the market at all.

Regarding format: Though the aim of comparability of the PRIIP KID documents is admirable – the comparability should only be a priority for de-facto comparable products, and it should be possible to adjust the KID accordingly.

Regarding MOP: We would like to underline that the market structure in Member States differ e.g. depending on the tax legislation, pension and insurance systems and cultural behaviour. It is important not to make changes that could harm well-functioning local markets. For this reason, we object to the proposed amendments regarding MOP.

Regarding costs: Retail investors in general are not interested in receiving granular information on costs and calculation methodologies but are mostly interested in price and total costs. In EBF members’ experience, retail investors find the reduction in yield (RIY) concept too difficult to understand. The EBF supports a closer alignment between MiFID II and PRIIPs as regards the calculation methodology for product costs as it is confusing for clients to receive different cost information for the same instrument.

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For more information:
Pauline Guérin, Senior Policy Advisor, p.guerin@ebf.eu

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About the EBF:

The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere.