More than 20 member countries of the European Union have backed a 12-month delay to the PRIIPs implementation date, following a rejection of its regulatory technical standards by the European Parliament last week.
In a document from the Council of the European Union, 23 out of 28 member countries, including the United Kingdom, France, Germany and Ireland, said pushing the implementation date back by one year to 31 December 2017 would provide sufficient time to clarify open questions and reach the goals of the PRIIPs regulation.
The proposal for a delay comes after European Parliament voted to reject the current regulatory technical standards for the implementation of PRIIPs Key Information Documents (KIDs) last week.
The statement from the countries reads: "We fully support the EU-wide introduction of a Key Information Document for retail investors which aims to provide retail investors with clear, accurate and comparable information on all the instruments included in the scope of the PRIIPs.
"We believe that it is important PRIIPs Regulation is fully applied and it is essential in order to meet the needs of EU citizens for products with which to build up savings and investments, whilst also contributing to efficient capital markets that help fund EU economic growth.
"Also in light of the rejection of the PRIIPS RTS by the EP, we call on the Commission to consider postponing only the application date of the PRIIPS Regulation (thus without any change to any other provision of the level 1 Regulation)."
The full list of countries backing the proposal is Germany, UK, France, Austria, Croatia, Sweden, Ireland, Slovenia, Lithuania, Cyprus, Romania, Finland, Denmark, Portugal, the Netherlands, Malta, Estonia, Hungary, Greece, Belgium, Latvia and the Czech Republic.
Cathy Pitt, funds partner with law firm CMS said: "Delaying implementation increasingly appears to be the only realistic option.
"Implementation of the PRIIPs Regulation without the unifying technical standards would carry significant risk to both investors and firms and would not achieve the intended benefit of harmonising investor disclosure to enable comparison of different products."
MEPs tabled the last-minute challenge to current PRIIPs rules on KIDs last month, arguing they could "mislead" retail investors in areas like performance.
It argues the methodology for the calculation of future performance scenarios in PRIIPs Key Information Documents does not fulfill the requirement under Regulation (EU NO 1286/2014) to provide information which is "accurate, fair, clear and not misleading".
MEPs have warned the methodology does not in some cases inform investors they could lose money, even for products which have regularly led to losses over the recommended minimum holding period.