PRIIPs has been in application for a number of months now, and it has become apparent that the method used to prepare key information documents (KIDs), as required by European regulations, is leading fairly often to unrealistic or misleading results, particularly regarding performance scenarios (see AMAFI Newsletter No. 134). This situation is extremely concerning for firms that find themselves facing regulatory risk as well as commercial and reputational risk. Since the same concerns are being voiced in Germany, after consultation with Deutsche Derivate Verband (DDV), the body that represents German structured product manufacturers, a joint AMAFI-DDV letter was sent to the European Commission. The aim was not only to sound the alert about these outcomes, which are totally at odds with the objectives pursued by PRIIPs, but also to propose solutions. The document is available at www.amafi.fr

Selling restrictions

In early April, AMAFI published suggested language for selling restrictions, in French and English (AMAFI / 18-21 FR and EN). The aim is to enable issuers of products which are exclusively issued for subscription by non-retail investors but listed on a regulated market to show that these products are not intended for retail investors. As a result, and in accordance with the response provided by the European supervisory authorities in the Q&A on KIDs, these products may be excluded from the obligation to draw up a KID.