BRUSSELS, Sept 20 Most European Union states
want to postpone new EU rules meant to protect investors in life
insurance, funds and other retail financial products because
parts of the reform might be misleading.
In a joint statement, 23 of the 28 EU states have urged the
European Commission to delay by one year the application of the
new rules on so-called packaged retail and insurance-based
investment products, or PRIIPs.
The new rules, due to come into force in January, cover a 10
trillion euro ($11.25 trillion) market and will force banks and
insurers to use a standard "key information document", or KID.
The goal is to help consumers across the bloc for the first
time to compare products in what are often national markets
dominated by mutual funds.
The statement, which was dated Sept. 19 and distributed to
journalists on Tuesday, came a week after the European
Parliament rejected the new rules. Italy, Poland,
Spain, Luxembourg and Slovakia did not sign it.
The KID is supposed to be written on no more than three
pages of jargon-free language and must accompany each savings
product, derivatives and life insurance policy to show the buyer
potential future performance and total costs.
European Parliament lawmakers said last week the proposed
KID, which would replace a patchwork of documents given to
customers for financial products, used an adverse scenario for a
product's potential performance that was too optimistic.
The EU governments that signed the statement said a delay
was needed "to provide sufficient time to clarify open
questions". They want the proposed law to remain unchanged, but
call for clarifications on the technical standards to apply it.
"The suggested postponement of PRIIPS by one year seems
reasonable. The EU Commission should now abstain from
introducing PRIIPs without binding technical standards," said
Sven Giegold, a German Green EU lawmaker. "This would risk legal
uncertainty for financial providers."
EFAMA, which speaks for the mutual funds industry, and
Insurance Europe representing insurers have both called for a
postponement in the application date but not in the underlying
(Reporting by Francesco Guarascio; Editing by Tom Heneghan)