Considerations on COM(2021)399 - Amendment of Directive 2009/65/EC as regards the use of key information documents by management companies of undertakings for collective investment in transferable securities (UCITS)

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dossier COM(2021)399 - Amendment of Directive 2009/65/EC as regards the use of key information documents by management companies of undertakings ...
document COM(2021)399 EN
date December 15, 2021
 
table>(1)Article 78 of Directive 2009/65/EC of the European Parliament and of the Council (3) requires investment companies and management companies to draw up a short document containing key information about the essential characteristics of undertakings for collective investment in transferable securities (UCITS) offered to investors (‘key investor information’), so that those investors are reasonably able to understand the nature and the risks of the UCITS that is being offered to them and, consequently, to take investment decisions on an informed basis.
(2)Regulation (EU) No 1286/2014 of the European Parliament and of the Council (4) requires manufacturers of packaged retail and insurance-based investment products (PRIIPs), before making a PRIIP available to retail investors, to draw up and publish a key information document (‘KID’) for that product in order to enable such retail investors to understand and compare the key features and risks of the PRIIP.

(3)UCITS also qualify as PRIIPs, for which a KID is required pursuant to Regulation (EU) No 1286/2014. Article 32(1) of that Regulation, however, exempts management companies as defined in Article 2(1), point (b), of Directive 2009/65/EC, investment companies as referred to in Article 27 of that Directive and persons advising on, or selling, units of UCITS as referred to in Article 1(2) of that Directive from the obligations laid down in that Regulation, and thus from the requirement to produce a KID, until 31 December 2021 (‘the transitional arrangement’).

(4)Commission Delegated Regulation (EU) 2017/653 (5) supplements Regulation (EU) No 1286/2014 by laying down regulatory technical standards with regard to the presentation, content and standard format of the KID, the methodology for the presentation of risk and reward and for the calculation of costs, the conditions and minimum frequency for reviewing the information contained in the KID, and the conditions for providing the KID to retail investors.

(5)On 7 September 2021, the Commission adopted a Delegated Regulation amending the regulatory technical standards laid down in Delegated Regulation (EU) 2017/653 as regards the underpinning methodology and presentation of performance scenarios, the presentation of costs and the methodology for the calculation of summary cost indicators, the presentation and content of information on past performance and the presentation of costs by PRIIPs offering a range of options for investment and alignment of the transitional arrangement for PRIIP manufacturers offering units of funds referred to in Article 32 of Regulation (EU) No 1286/2014 as underlying investment options with the prolonged transitional arrangement laid down in that Article. The date of application of that Delegated Regulation is 1 July 2022, but it is important to reflect the need to give management companies, investment companies and persons advising on, or selling, units of UCITS and non-UCITS sufficient time to prepare for the end of the transitional arrangement and thus for the obligation to produce a KID.

(6)In order to ensure that the need for sufficient time to prepare for the obligation to produce a KID is met, Regulation (EU) No 1286/2014 has been amended by Regulation (EU) 2021/2259 of the European Parliament of the Council (6) to extend the transitional arrangement until 31 December 2022.

(7)The key investor information and the KID cover essentially the same information requirements. It is therefore necessary to ensure that retail investors in PRIIPs interested in acquiring units of UCITS do not receive, from 1 January 2023, both documents for the same financial product. It should therefore be laid down that the KID is to be considered to satisfy the requirements applicable to the key investor information. In addition, for investors other than retail investors, investment companies and management companies should continue to draw up key investor information in accordance with Directive 2009/65/EC, unless they decide to draw up a KID as set out in Regulation (EU) No 1286/2014. In such cases, investment companies and management companies should not be required by competent authorities to provide the key investor information, and only the KID should be provided to those investors.

(8)Directive 2009/65/EC should therefore be amended accordingly,