On 22 June 2018, the European Securities and Markets Authority (ESMA) published a speech (Speech) by Steven Maijoor, Chair of ESMA, delivered at the joint European Supervisory Authorities’ (ESAs) consumer protection day. Although discussing transparency of costs at length, the Speech is perhaps most notable for Mr Maijoor’s comments on the implementation of PRIIPs and the ESAs’ programme of action in this area.
In the Speech, clarification about the scope of PRIIPs was stated to be considered a “level 1 issue”, particularly in relation to corporate bonds and non-structured securities. ESMA was in discussions with the Commission to make further guidance for market participants available quickly.
Mr Maijoor also stated that some specific aspects of performance scenarios were being considered by ESMA. He stated ESMA’s intention to provide a Q&A on the subject of the presentation and calculation of performance scenarios for PRIIPs with a recommended holding period of less than a year. He also noted that ESMA is working on developing a converged approach on the use of past performance in performance scenarios, to ensure a consistency in approaches taken by manufacturers and distributors to inform their clients on the meaning of such performance scenarios.
Finally, using data received from associations of the fund industry, Mr Maijoor stated that the ESAs were currently assessing whether any aspect of the methodology to transaction costs needs amending or clarification, following concerns about negative transaction costs and high transaction costs under PRIIPs.
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