Implementation of EU PRIIPs regulation | inadequate calculation results
Dear Mr Maijoor, dear Mr Bernardino,
In our capacity as representatives of EUSIPA, the European roof association uniting issuers of structured products, we would like to draw your urgent attention to severe problems of the industry in complying with some of the requirements for the Key Information Documents (KIDs). These relate to the methods prescribed for the calculation of cost, performance scenarios and the Synthetic Risk Indicator (SRI), all of which form an integral part of the KID’s content.
The banks represented by EUSIPA and its member associations have, in the absence of regulatory guidance, devised different strategies to ensure compliance with at least the ratio legis of the PRIIPs implementation rules, while at the same time avoiding to establish misleading information for investors to the extent practically possible.
In order to create at the same time both legal certainty and meaningful information for investors, we would however urgently ask regulators and the EU Commission to review the relevant rules and applicable methodologies and to provide (updated) regulatory guidance on this basis.
To illustrate issues on a more technical level, the entire product area of leverage products faces a complete lack of clarity as for how to determine an appropriate recommended holding period for their products based on the relevant provisions.