Earlier this week, the European Parliament’s Economic and Monetary Committee (ECON) had already unanimously rejected the European Commission’s investor protection proposals for consumers who buy packaged retail and insurance-based investment products (PRIIPs).
The draft legislation consisted of regulatory technical standards (RTS) that accompany the PRIIPs Regulation[1] and were developed by the Commission to provide greater protection to consumers. However, the ECON Committee stated that they were so “flawed and misleading” that they could actually make consumers lose money. Retail investors typically use PRIIPs to generate funds to pay a mortgage or for their children’s education.
Today, the European Parliament backed the view of its ECON Committee and passed a resolution in plenary session, calling for changes to legislation on PRIIPs Regulation – a market worth up to €10 trillion in Europe – by 602 votes to 4, with 12 abstentions. Unusually, the RTS will now be returned to the EU Commission for revision.
The Commission will now have to propose new RTS for implementing the PRIIPs legislation, which is due to come into force on 31 December 2016. It remains unclear whether this will result in a pushback of the deadline for the PRIIPS regulation implementation, which is currently set at 31 December 2016.
Related links
[1] Regulation 1286/2014 of 26 November 2014 on key information documents for packaged retail and insurance-based investment products.
