Pimfa is calling for the Priips regime to be suspended until a full review has been completed.
The trade body believes information provided to investors in accordance with the Priips key information document regime is “doing more harm than good”. It says the European supervisory authorities’ “hastily-drafted” proposals for amending KID performance scenarios are unlikely to improve the situation.
Pimfa’s view is that the Priips regime has many significant flaws which the ESAs’ recent consultation failed to mention at all. Pimfa believes it should not be a regulatory requirement for retail investors to be provided with product information which it says could be misleading.
It is calling for a thorough review of the Priips regime and for it to be suspended until a more informative, fit-for-purpose regime that both consumers and industry can have confidence in can take its place.
Pimfa chief executive office Liz Field (pictured) says: “We believe that the ESAs’ consultation exercise is misconceived, a “sticking plaster” that can neither hide nor address the fundamental flaws of the regime as a whole. Virtually every aspect of the Priips regime – scope, risk indicators, cost disclosures, access to third country products – is problematic and the ESAs’ targeted review looking only at performance scenarios fails to acknowledge or address this.
“An immediate suspension of the Priips regime would have multiple benefits – it would prevent investors from being misinformed by regulatory disclosures, it would save industry from spending time and money on ill-considered quick-fixes that do not work, it would provide time for a thorough-going review of all aspects of the regime and it would enable a fresh start at some future point that regulators, industry and investors alike could support.”
Pimfa is not the only trade body to raise concerns about Priips. The European Fund and Asset Management Association called for key information documents to be revised in June, saying they were causing “serious detriment” to investors.
The Investment Association and Association of Investment Companies have also both put pressure on the FCA to act over Pripps rules.