European Parliament votes to reject the RTS under PRIIPs

European Parliament votes to reject the RTS under PRIIPs

The European Parliament recently voted to reject the delegated Regulatory Technical Standards (RTS) under the PRIIPs Regulation. Charlotte Henry, senior associate, and Emma Coles, government relations manager at Norton Rose Fulbright, consider the implications of the decision.

The European Parliament has voted to reject the RTS, what happens now?

The European Parliament’s decision to reject the delegated RTS under the Regulation (EU) 1286/2014 on key information documents for packaged retail and insurance based investment products (the PRIIPs Regulation) was unprecedented. This was the first time either the European Parliament or Council have rejected draft RTS since the instruments were introduced in 2010. There is no precedent for next steps in this situation, which is made more complicated by the Council of the EU’s endorsement of the RTS, albeit by a narrow margin.

The European Commission must now produce a new draft of the RTS which will have to be approved by the Parliament and Council. In order to ensure the re-drafted RTS are not also rejected, the Commission will hold informal meetings with MEPs and Member State representatives to find ways of addressing MEPs’ concerns. The Commission intends to work quickly, in order to ensure the RTS are finalised before PRIIPs applies on 31 December 2016.

The European Parliament resolution sets out a list of required changes to the RTS. The Commission is not obliged to make all of these changes but will be keen to ensure that the RTS are not rejected a second time. This will mean finding an agreement with the Parliament on these points. In the absence of any proposed solutions for the Parliament, the onus is now on the Commission to put forward proposals that meet MEPs’ conce

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