No End to the Wave of Regulatory Change, but Some Welcome Changes and Delays

_In this newsletter, our lawyers are reporting on some of the wide ranging European regulatory initiatives that will impact the vast majority of market participants. These should not be viewed with cynicism, as while we are in a period of unprecedented regulatory burden, many of the proposed changes seek to ease this burden, while others will create new market opportunities.

No discussion on regulation would be complete without mentioning the Sustainable Finance Disclosure Regulation (“SFDR”). Its implementation is a hugely complex undertaking, and we have already seen a delay to the application of the regulatory technical standards (“RTS”) to 1 July 2022, which itself was a delayed application date. On 25 November 2021, the European Commission confirmd that, due to the length and technical detail of the 13 RTS under consideration, it is further postponing the date of application of the RTS to 1 January 2023. While this delay is welcomed, financial market participants are reminded that, where they have to provide disclosures under SFDR, they are expected to comply with the requirements on a best efforts basis until then.

Another hotly anticipated regulatory deadline was the date from which UCITS would have to provide key information documents (KIDs) under the PRIIPs Regulation. On 23 November 2021, the European Parliament voted to extend the UCITS exemption, and pushed the implementation date from 1 July 2022 to 1 January 2023. It should also be noted that a UCITS KIID will no longer be required as long as a PRIIP KID is produced, removing a previous provision that required them to be produced in tandem for a period of time.

Mark Shaw, Investment Funds Partner and Head of London Office