Will PRIIPs and MiFID II be the Grinches who steal this year’s Christmas?

Now December is upon us, we are counting down to PRIIPs and MiFID II in days, rather than weeks or months.

If you are a provider of PRIIPs, you need to have your key information documents (KIDs) produced and posted on your website and elsewhere, so buyers and distributors can find them before they complete an investment after the end of this year.

Manufacturers of UCITS (and many NURS funds), which will continue to issue their key investor information documents (KIIDs) for another two years, are not completely exempt from PRIIPs if they manage funds with life assurance “mirror” funds.  Those mirror funds are PRIIPs and the life companies are responsible for issuing their own KIDs, mostly with data from the asset managers and ideally using the industry standard European PRIIPs Template (EPT).

Because the calculations for PRIIPs KIDs are different from those on UCITS KIIDs, asset managers need to carry out additional work to provide life companies with the necessary data for those mirror funds.  FE’s EPT solution takes that extra work off fund groups and carries out the calculations necessary, based on the fund data, much of which we already collect.

As the need for EPT is determined by relationships between fund groups and life companies, most of those affected kicked off their projects some time ago.  Whether they started early enough remains to be seen, but we’ll know soon enough.

MiFID II presents a very different picture, as it affects many more activities in more companies, including UCITS managers that are technically out of scope.  In respect of client reporting, the challenges include distributors (platforms, advisers and DFMs, mostly), getting all the data from fund groups on all the funds their clients can buy and fund groups making sure their fund data is available to all distributors that need it.  To complicate matters, when it comes to the annual post-sale (“ex post”) reporting, data will be needed on all funds a distributor’s clients hold, even if they are not on their buy list.

We closed our European MiFID Template (EMT) solution to new clients several weeks ago, but we are still offering a“self-service” option for distributors to receive the complete file with data from all fund groups supplying us.  From this, they can extract the ones they need to produce their client reports and assess the funds’ target markets.

The FCA has said it expects to see MiFID II project staff still available in the early part of 2018 to deal with any late changes, clarifications or issues that arise in the live environment, so don’t think it’s all over by Christmas.  As is so often the case, Winston Churchill had an apt quote for this: “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

For more information, please contact us.