Published: 6th December 2017


Of relevance to: Manufacturers of packaged retail and insurance-based investment products and persons advising on, or selling, those products to retail investors
Don’t be caught unawares – if you have staff invested or distributors, you could be caught!
Key date: Applicable from 1 January 2018

EU Regulation No 1286/2014 (the “PRIIPs Regulation”) requires those manufacturing a packaged retail and insurance-based investment product (“PRIIP”) to draw up a key information document (“KID”) containing standard information, and requires persons advising on or selling PRIIPs to provide the KID to retail investors, with effect from 1 January 2018.

The UK PRIIPs Regulations (Statutory Instrument 2017 No.1127: The Packaged Retail and Insurance-based Investment Products Regulations 2017) have been laid before Parliament and similarly come into force on 1 January 2018.  They designate the FCA as the competent authority in the UK for the purposes of the PRIIPs Regulation and give the FCA certain enforcement powers.

Where a person has infringed the requirements of the PRIIPs Regulation, these enforcement powers include the power to:

  • prohibit or suspend the marketing of a PRIIP,
  • prohibit the provision of a KID, or
  • require the publication of a new version of a KID.

The FCA also now has the power to impose penalties and make a statement (such as a ‘supervisory notice’, ‘warning notice’ or a ‘decision notice’) in relation to a contravention of the PRIIPs Regulation.

Where any of these have been actioned, the FCA may—

  1. issue a direct communication to the retail investor concerned, giving the investor information about the sanction, and informing the investor where to lodge complaints or submit claims for redress; or
  2. require the PRIIP manufacturer or person advising on, or selling, the PRIIP to issue such a communication to any retail investors concerned specified by the FCA or to retail investors of a description specified by the FCA.

The UK PRIIPs Regulations make the following important additions:

  • The Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes) (Exemption) Order 2001 (S.I. 2001/1060) – addition of new article 31 stating that the ‘scheme promotion restriction‘ does not apply to any communication required by Article 13 of the PRIIPs Regulation.
  • The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (S.I. 2005/1529) – addition of new article 20C stating that the financial promotion restriction does not apply to any communication required by Article 13 of the PRIIPs Regulation.