Transition of UCITS KIID to PRIIPS KID : key challenges and ethical issues

Abstract

Transition of UCITS KIID to PRIIPs KID is a popular topic that have created uncertainties, confusions, issues, concerns and challenges, but, it also led to new suggestions that returned EU back to the drawing board. The idea of creating a new KID framework, is to increase investors protection and their trust. Changes in costs, fund performances, KID style and length, producing KID in general, presents a huge procedural challenge and a lot of work for investment firms that could eventually result with investors rejection and criticism. Because, this transition could go in opposite way, it could make the process more confusing and it could also lead to money loss for banks, asset managers and insurance companies. Starting from January 1, 2022, all UCITS KIID should be entirely phased out and replaced with PRIIPs KID. Opinions about transition are divided, pressure on authorities is raised and decisions must be made. From the implementation of the PRIIPs regulations it has been clear that UCITS will become subject of that regulation. Three European Supervisory Authorities (ESMA, EIOPA, EBA) are currently reviewing PRIIPs regulations and targeted amendments will be proposed to the European Commission. The objective of the thesis is to give an insight and example how companies like Deloitte Luxembourg will be facing with this transition. More specifically, thesis addresses some of the ethical issues involved with this transition, notably as regards transparency, quality and access to information.