Transacting the Transactional

19th October 2020 3864 - Blog Posts

It’s about the only time it’s with gratitude that we can use a couple of acronym; PRIIPS and KIDs, and be grateful!…The alternative is having to use all our time saying – Packaged Retail and Insurance-based Investment Products Regulation (“PRIIPs Regulation”) combined with its related brother, the Key Information Disclosure (KID).

These directives have been in place since around 2018 providing protection for retail client investors, predominantly manufacturers and distributors, transacting within the EEA (European Economic Area). KIDs complement’s the associated PRIIPS vehicle that provides standalone pre trade and pre contractual information supporting transactions.

It’s a complex set of directives that are under constant change. Hugely time consuming for Investment Managers and Firms, the legislation is intrinsically linked to mutual transaction directives,  which are computationally and mathematically intricate and dependent upon data driven accuracy, with each PRIIPS and KID directive remaining mutually collaborative with each other, for the delivery and audit of pre and post transactions. Where there is complexity, repetition and continuing evolution of regionalised directives and regulatory changes, it creates conditions for the introduction of technology and automation to deliver the more generic and often onerous elements of the legislative driven workflows. It’s no different here and hosted software platforms that facilitate expedition, execution and streamlining of PRIIPS and KIDs must surely be on every Investment Managers wish list? Current legislative PRIIPS discussions remain underway from the latest April 2020 technical amendments, with further changes planned by the European Commission.

In many cases there still remains strong contention on the changes and potential issues they raise, and it comes as no surprise to many that timelines are being subsequently stretched with regards to the final framework definition statement. Another challenge for Investment managers seeking to keep up to date. It’s like an endless road with no fixed timelines.

Whilst the subject is significantly broader and complex in its entirety and scope than I may ever hope to convey within this short article, consideration must be given towards outsourcing which can help alleviate the more transactional and computational leg work involved in the PRIIPS and KIDs regulatory deliverables,  whilst simultaneously remaining and importantly, within the current legislative landscape, whatever the current and latest issuance interpretation may be – surely one reason enough to consider engaging with partners that may facilitate an out-tasked RegTech approach; leveraging automation, software applications, technology and subject matter expertise.

Learn more about our PRIIPS KIDS solutions, click here.

 

Author

Andrew Frost Executive Director