On 15 July 2021, as previously expected, the European Commission published a consultation paper calling for an extension of the exemption period for the UCITS KIID until 30 June 2022.
The justification for this request is that the current deadline of 31 December 2021 (Article 32(1) of Regulation (EU) No 1286/2014 of PRIIPs) cannot be met. Because of new methodology for performance scenarios, changes in transaction costs and presentation of costs, look-through requirements and much more - the volume of work required to be compliant would simply not fit into such a limited time.
Negligently, IT systems will need to be fully adapted before the due date, as this regulation affects many areas, such as a significant change in the MiFID target market (in most cases, the risk of the UCITS will change on the scale from 1 to 7).
All ESAs have already submitted their drafts for the new PRIIPs RTSs on 03 February 2021. This change, which was initially scheduled to come into force on 01 January 2022, is also expected to be postponed to 01 July 2022 - matching the new expiry date of the UCITS exemption. In effect, this will enable the implementation of the new PRIIPs RTSs and the conversion of UCITS to PRIIPs in a combined delivery.
To facilitate the transition from UCITS KIID to PRIIPs KID, the new timeframe gives the industry more margin to be ready for PRIIPs version 2. Given the extensive processes involved, it is recommended to tackle the conversions early.
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