UNITED KINGDOM: HM Treasury to Extend PRIIPs Exemption for UCITS Funds for Five Years

Tuesday June 1 2021

On 1^st June 2021, HM Treasury announced that the current exemption for Undertakings for the Collective Investment in Transferable Securities (UCITS) funds from the requirements of the Packaged Retail Investment and Insurance-based Products (PRIIPs) Regulation will be extended by five years to 31 December 2026.

Undertakings for the Collective Investment in Transferable Securities (UCITS) funds are currently exempted from the requirements of the Packaged Retail Investment and Insurance-based Products (PRIIPs) Regulation. This means that, instead of producing a Key Information Document (KID), UCITS funds providers must produce a Key Investor Information Document (KIID), as per the requirements of the UCITS Directive.

This exemption was due to expire on 31 December 2021.

HM Treasury intends to legislate to extend this exemption to 31 December 2026. This legislation will be made under a power the Treasury was granted in the Financial Services Act 2021 to extend the current exemption by five years if required.

While the current exemption will be extended by five years, depending on from the result of HM Treasury’s review of the UK retail disclosure regime, changes to the PRIIPs Regulation may be made – or a successor regulation may be introduced – sooner than 2026. In this scenario, considerations would be made to ensure a smooth transition to the new regime for all retail investment product providers, including those marketing UCITS funds.

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