Undertakings for collective investment in transferable securities (UCITS) meet the definition of a PRIIP. However, the PRIIPs Regulation provides for a transitional regime for UCITS until 31 December 2019, the effect of which is that the current UCITS key investor information document (KIID) regime remains in place and UCITS / management companies are not required to produce a KID under the PRIIPs Regulation.
By December 2018, the European Commission must decide whether to (1) prolong these transitional arrangements, (2) require UCITS management companies to produce a PRIIPs KID instead of a UCITS KIID, or (3) consider the UCITS KIID equivalent to the PRIIPs KID.
The position for UCITS and their management companies remains unclear. The current rejected draft RTS requires that where a UCITS is used as the reference product underlying a PRIIP, the PRIIP manufacturer will be obliged to produce a KID if the product is intended for retail distribution. In this scenario it is the PRIIP manufacturer which will likely prepare the KID, it will expect SRI, performance scenarios and costs and charges to be delivered to it by the UCITS.
In practice, we have seen little interaction to date between the insurance community (PRIIP manufacturer) and UCITS providers (manufacturer of the underlying reference product). Market practice has yet to develop on the interaction between both parties. See our PRIIPs KID Dos and Don’ts for more information.
For further information on the impact of PRIIPs for UCITS:
UCITS KIID v PRIIPs KID - Content and layout key points of comparison
UCITS KIID v PRIIPs KID - The two regimes and key points of comparison
PRIIPs KID - Dos and Don’ts
For information on the impact of PRIIPs for NURS, please contact Penny Miller, Neil Simmonds or Catherine Weeks.