GB - FCA Consultation on Post-Brexit Changes to PRIIPS Regulation

The consultation seeks to clarify the scope of the PRIIPs regulation, making it clearer that certain common features of these instruments do not make them into PRIIPs. The FCA is proposing to amend the scope of the PRIIPs regime in relation to corporate bonds, confirming which features do not turn a debt security into a PRIIP as well as looking to clarify the type of corporate bond that would normally be a PRIIP. The regulator proposes to amend the PRIIPs RTS to require written explanation on performance in the KID. It suggests replacing the requirement for presentation of performance scenarios in the KID with a requirement for narrative information on performance. The consultation paper also addresses the potential for PRIIPs being assigned an inappropriately low summary risk indicator in the KID, and concerns over the methodology for calculating transaction costs. Subject to the outcome of this consultation, the FCA plans to amend the PRIIPs RTS by the end of 2021, with any changes made coming into effect on the 1st January 2022.