The Association of Investment Companies (AIC) has responded to the FCA’s Consultation Paper CP21/23, PRIIPs – Proposed scope rules and amendments to Regulatory Technical Standards.
The paper seeks feedback on proposed changes to the Packaged Retail and Insurance based Investment Products (PRIIPs) disclosure regime, including misleading performance scenarios and summary risk indicators in Key Information Documents (KIDs).
Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “We understand that the past 12 months have been very challenging for the government and regulators but it’s time to make meaningful changes to KIDs. Enough is enough. The Treasury committed to a wholesale review of the regulation in July 2020 and we are still waiting for progress. Given the problems with KIDs, which have been widely recognised ever since their launch four years ago, it’s clear the FCA’s proposals don’t go far enough. Swapping performance scenarios for narratives and allowing KID producers to manually upgrade their risk ratings won’t address the fundamental flaws with these documents.
“The FCA acknowledges the harm KIDs pose to consumers. Rather than tinkering around the edges, the Treasury should conduct a full-scale review of the PRIIPs regulation. Until that happens, KIDs should be suspended. Far from helping people make better informed decisions, these documents are misleading investors and distorting the market, with UCITS funds still producing an entirely different disclosure that is not comparable. We call on the Chancellor to announce a more meaningful review alongside the Autumn Budget.”