ECON and the EU Extend UCITS PRIIP KID Requirements

he European Parliament’s Committee on Economic and Monetary Affairs (ECON) and the Council of the European Union have recently agreed to extend the transitional period for the UCITS PRIIP KID requirement until the end of 2021.

The UCITS transition period was originally planned to conclude on December 31st, 2019.  From there, it was extended to December 31st, 2021. Then, most recently, the deadline was moved to June 30th, 2022, to coincide with the planned enforcement date of the EU Commission adopted PRIIP RTS amendments.

In an effort to enable management companies of UCITS and AIFs to have sufficient time to prepare for the obligation to produce a KID, the EU parliament and council are, again, amending the following regulations to ensure a transitional period extension to December 31st 2022:

• A directive amending the UCITS Directive (2009/65/EC) to ensure PRIIP KIDS meet the key investor requirements for UCITS
• A regulation amending the PRIIPs Regulation (EU) No 1286/2014 to extend the transitional regime for management companies, investment companies, and persons advising on, or selling, units of UCITS and non-UCITS from the requirement of providing a PRIIP KID to retail investors within 12 months, until December 31st, 2022.
  The final legislation of the extension is pending formal approval of the EU Parliament and is expected to be passed by the end of 2021.

Based on our analysis, the extension largely covers UCITS and AIFs inside of the transitional period. The EU PRIIP RTS amendments that were finalized and passed through the EU Commission, and proposed to Parliament earlier in 2021, are still planned to be enforced on July 1st, 2022. This means the existing manufacturers who fall under PRIIP KID obligations (e.g., OTC and structured product manufacturers) would still need to be prepared for the July 1st, 2022, update of PRIIP KIDs, according to the updated RTS requirements. However, it may still be possible that RPIIPs RTS amendments are also postponed, with a change of the enforcement date, once the proposal is voted on in the EU Parliament.

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