Joint ESA Supervisory Statement – application of scope of the PRIIPs Regulation to bonds (JC-2019-64)
Statement
This Supervisory Statement of the European Supervisory Authorities (ESAs) seeks to mitigate the risk of divergent application by National Competent Authorities (NCAs) of Regulation (EU) No 1286/2014 (PRIIPs Regulation) as regards determining the type of bonds for which it is necessary to draw up a Key Information Document (KID).
The overall objective of this statement is to achieve a high, effective and consistent level of regulation and national supervision promoting a level playing field and the protection of retail investors.
In the view of the ESAs, uncertainty over the application of the PRIIPs Regulation to bonds, has led to negative consequences for the functioning of bond markets, and access to these markets by retail investors. [The ESA set out their concerns on this issue and evidence of negative consequences in a letter to the European Commission on 19 July 2018 (JC 2018 21)] It also risks divergent applications by NCAs with negative consequences for achieving uniform levels of retail investor protection and a level playing field amongst product manufacturers and distributors within the EU.
The ESAs’ assessment is based on the observations collected and analysis conducted by the ESAs and by NCAs in the European Economic Area (EEA) since the implementation of the PRIIPs KID at the start of 2018.