Pressure mounts on FCA to act over ‘flawed’ Priips rules
By Katie Marriner
The Investment Association is the latest trade body to urge the FCA to suspend parts of the Priips rules introduced in January.
The Financial Times reports the IA saying investors are receiving information about fund costs that is “profoundly flawed” as a result of the regulation.
Included in recommendations for overhauling Priips, the IA is calling for the suspension of slippage cost calculation methodology.
The pressure from the IA follows the Association of Investment Companies last month calling for the Priips key information documents to be suspended.
The AIC also wants the Treasury select committee to launch an inquiry into KIDs because of what it sees as a failure of policymakers and regulators to take action to protect consumers.
Since 1 January, Priips legislation has meant advisers have to publish a stand-alone, standardised KID to their clients including performance scenarios, risks, and the total cost of products.
The FCA has also raised concerned about the KIDs and has found some firms are not properly disclosing costs to investors as required under new Priips rules.
According to the FT, the IA says a new approach to the calculation of transaction costs is “urgently needed” and encouraged UK regulators to act “immediately and unilaterally” without waiting for an agreement with its European counterpart.
The report says, however, that the FCA does not flexibility over how the Priips rules are implemented because they are classified as “directly applicable” European legislation.