FCA Publishes UK PRIIPs Consultation Paper
On July 20, 2021, the FCA published Consultation Paper CP21/23 to collate industry view points on proposed amendments to the PRIIPs regulation as it applies in the UK – the FCA are doing this as they “want to address the lack of clarity on the PRIIPs scope and address concerns with performance scenarios, summary risk indicators and elements of the transaction costs methodology.” The proposal sets out options with respect to replacement of existing Annex IV (Performance Scenarios), and puts out options such as replacement with a narrative description of performance, a 10Y past performance analysis and a proposal to enable a firm to up-rate its SRI if they feel it is understating risk. The CP also doubles down on the FCAs’ continued support for the slippage calculation approach to transaction costs, but it does outline tweaks to the transaction cost methodologies as specified in the current legislation “to address issues arising from transaction cost reporting in specific contexts.” The comment form for the CP can be found here.