The European Fund and Asset Management Association (EFAMA) has sent a letter to MEP members of the ECON Committee expressing deep concerns about the latest developments of the PRIPs initiative.
The proposal, which is fundamental in terms of investor protection and creation of a level playing field in the area of retail distribution, was first brought to the table in 2007.
Recent discussions of PRIPs in the EU Parliament are increasingly diverging from the initial regulatory approach proposed by the Commission, and threaten to undermine the feasibility of the whole initiative. For example, the considerable extension of its scope to non-packaged products and introduction of rules on eligible assets would make the initiative unworkable.
Divergences in parliamentary debate of the 700 plus proposed amendments make it unlikely that a compromise will be reached in a reasonable timeframe. These new discussion points, which are not based on impact-assessment, and have not been subject to stakeholders’ consultation, are likely to significantly delay the adoption of the PRIPs regulation. This, in turn, would send a negative message about the importance of effective investor protection to EU legislators.
EFAMA is committed to restoring the PRIPs to its original goals and highlighting to policy makers that the proposal, which aims to increase investor protection through disclosure of investment products, is in danger of being pushed back yet again.
The European fund industry has always strongly supported a PRIPs initiative that ensures an alignment of product transparency standards among retail investment products through the introduction of a Key Information Document to enhancing product comparability for investors. EFAMA believes that the Commission’s proposal represents a balanced basis which can be improved in some respects, but should not be overrun by an entirely new regulatory approach.
EFAMA therefore urges MEPs to reinstall the primary objective of this initiative which is the provision of high quality standardised product information.
Peter De Proft (pictured), director general of EFAMA, says: “PRIPs is a key initiative to provide consumers with a level playing field when choosing between investment products. The initiative has been already been in discussion since 2007 and EFAMA urges European policymakers to make this crucial piece of legislation a reality without any more delays.”