MFSA: Circular to the financial services industry on the issue of the PRIIPS Regulation 

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The Malta Financial Services Authority (MFSA) would like to draw the attention of the financial services industry to the publication of Regulation (EU) No 1286/2014 of the European Parliament and of the Council of the 26 November 2014 on key information for packaged retail and insurance-based investment products (PRIIPS), hereinafter referred to as the ‘PRIIPS Regulation’.

This Regulation, may be accessed at the following link. It has been published in the Official Journal of the European Union on the 9th December, 2014 but shall apply as from the 31st December 2016.

What are PRIIPS? The term PRIIPS essentially encompasses any investment product that is in a packaged form. In order to be in a ‘packaged’ form, a product must either be wrapped or bundled or have other mechanisms that alter an investment in the product compared to a direct holding in the underlying assets.

It also includes such products issued by SPVs. PRIIPs includes investment funds (whether closed-ended or open-ended including UCITS); all structured products, whatever their form (e.g. packaged as insurance policies, funds, securities or banking products); insurance products whose surrender values are determined indirectly by returns on the insurance company’s own investments or even the profitability of the insurance company itself (e.g. with-profits); as well as derivative investments.Structured deposits (as defined in MiFID II) also fall within the definition.

Products that are not PRIIPs include the following:

  • products where the precise rate of return is set in advance for the entire life of the product;
  • basic banking products that contain no element of packaging such as deposit accounts (which are not structured);
  • plain shares and bonds (where there is a direct holding of the relevant assets);
  • insurance products that only offer insurance benefits, such as pure protection or non-life insurance (where the surrender value is not dependent on fluctuations in the performance of one or more underlying assets or reference values);
  • various pension schemes, such as occupational pension schemes and certain other employment based pension schemes which are mandatorily required by national law (e.g. auto enrolled schemes)

Read more: PRIIPS Circular

Source: MFSA – Circular to the financial services industry on the issue of the PRIIPS Regulation

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