Florian van Megen, Retail Markets Specialist at the Investment Association, urged the Commission to amend the presentation of costs and charges and improve the performance disclosure by adding historic performance alongside future scenarios.
Following the European Union Parliament’s decision to reject the regulatory technical standards for the PRIIP KID, Mr van Megen said: “We agree with the overwhelming majority of the European Parliament that rejected the proposals for the PRIIP KID requirements. The proposed rules would have led to extremely flawed and misleading retail investor disclosure. While past performance is not a guide to future performance, the inability to see the historic delivery of a product is risky for consumers. Although we do not disagree with the inclusion of future performance scenarios, we do not believe these should be given in isolation. Only past performance reliably shows the investment experience and a manager’s track record.
“We are fully supportive of comprehensive costs and charges disclosure, but the rejected suggestion is based on assumptions rather than real delivery. Not only could it mislead investors by not showing what they will actually pay but it also makes the comparison of different products impossible. Now is the time for the Commission to produce KID requirements that will give consumers the information they need to make informed investment choices.”
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