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1. SOLVENCY II
1.1 European Commission publishes ITS on templates for
the submission of information necessary for supervision under
Solvency II
On 5 May 2023, Commission Implementing Regulation (EU) 2023/894
laying down implementing technical standards (ITS) for the
application of the Solvency II Directive (2009/138/EC) with regard
to the templates for the submission by insurance and reinsurance
undertakings to their supervisory authorities of information
necessary for their supervision and repealing Implementing
Regulation (EU) 2015/2450 (Implementing Regulation) was published
in the Official Journal of the European Union (OJ).
The Implementing Regulation contains various supervisory
reporting templates including:
- Templates For Supervisory Reporting;
- Quantitative Reporting Templates for Individual Undertakings;
and - Quantitative Reporting Templates for Groups.
The text of the Implementing Regulation can be accessed here.
2. EUROPEAN INSURANCE AND OCCUPATIONAL PENSIONS AUTHORITY
(EIOPA)
2.1 EIOPA updates Q&As on Regulation
During the second quarter of 2023, the European Insurance and
Occupational Pensions Authority (EIOPA) published updated Q&As
on the following topics, relating to the Solvency II Directive:
3. INSURANCE DISTRIBUTION DIRECTIVE (IDD)
3.1 EU Commission adopts Retail Investment
Strategy
On 24 May 2023, the European Commission published its Retail
Investment Strategy seeking to “empower retail investors to
make investment decisions that are aligned with their needs and
preferences, ensuring that they are treated fairly and duly
protected”.
The proposal comprises:
- a Directive amending rules set out in the Undertakings for
Collective Investment in Transferable Securities Directive
(UCITS Directive) 1 , the Solvency II
Directive2 , the Alternative Investment Fund Managers
Directive (AIFMD) 3 , MiFID
II4 , and the Insurance Distribution Directive
(IDD) 5 (the Omnibus Directive
Proposal), which can be accessed here; and - a Regulation amending the Packaged Retail and Insurance-based
Investment Products Regulation (PRIIPs Regulation)
6 , in particular with regard to rules on the key
information document (KID), which can be accessed
here.
(together, the Legislative Proposals).
The European Commission aims to amend organisational and conduct
requirements for various types of financial firms and to align
regulatory requirements across different distribution channels.
The Legislative Proposals include the following measures:
- The modernisation of disclosure rules, adapting them to the
digital age and investors’ sustainability preferences; - The development of benchmarks against which the value of
financial products need to be assessed; - The addressing of potential conflicts of interest by banning
inducements for “execution-only” sales and strengthening
conditions where inducements are allowed; - Ensuring financial advisors examine retail investors’
financial situation more carefully; - Requiring that marketing be fair, clear and not misleading also
via digital channels and finfluencers; - The improvement of both financial advisors’ and retail
investors’ knowledge of financial markets; - The improvement of investor categorisation by reforming the
eligibility criteria for professional investors; and - The enhancement of supervisory cooperation between national
competent authorities and the European Supervisory Authorities
(ESAs).
4. PRIIPS
4.1 Publication of Consolidated FAQ on PRIIPS
Regulation
On 17 May 2023, the ESAs published a consolidated Q&A
containing all responses given by the European Commission on the
PRIIPs Regulation (coded in blue) as well as all responses provided
by the ESAs relating to the practical application or implication of
the PRIIPS Regulation and its delegated acts to date (not colour
coded).
A copy of the consolidated Q&A can be accessed here.
4.2 European Commission proposes amendments to PRIIPs
Regulation
On 24 May 2023, the European Commission published its Retail
Investment Strategy which, in addition to the proposed measures set
out at Section 3.1 above, proposes targeted changes to the PRIIPS
Regulation which are intended to improve information for investors
and their ability to take well-informed decisions as well as
adapting disclosures to the digital environment.
The proposed changes to the PRIIPS Regulation and related
implementing measures include (but are not limited to):
- The inclusion of a new section in the PRIIPS KID entitled
“How environmentally sustainable is this product” which
is intended to complement the existing EU sustainable finance
disclosure framework; - The inclusion of a new “dashboard” of key information
on the first page of the PRIIPS KID which will provide information
on the summary risk indicator, “total costs” figure and
recommended holding period; - Clarifying that certain types of corporate bonds with
make-whole causes are out of the scope of the PRIIPs Regulation
provided that they are redeemed at a fair value; - Amending the rules for presenting costs of multi-option
products (MOPs); and - Introduction of other changes to adapt the PRIIPS KID to a
digital environment.
The legislative proposals put forward by the European Commission
must now be considered by the European Parliament and the Council
of Europe.
The proposed amendments to the PRIIPS Regulation can be accessed
here.
A Dillon Eustace briefing on the topic can be accessedhere.
To view the full article click here
Footnotes
1. Directive 2009/65/EC
2. Directive 2009/138/EC
3. Directive 2011/61/EU
4. Directive 2014/65/EU
5. Directive 2016/97
6. Regulation (EU) No 1286/2014
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