Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019

Motion to Approve

That the draft Regulations laid before the House on 9 January be approved.

My Lords, the Treasury has been undertaking a programme of legislation to ensure that, if the UK leaves the EU without a deal or an implementation period, there continues to be a functioning legislative and regulatory regime for financial services in the UK. The Treasury is laying SIs under the EU withdrawal Act to deliver this. A number of debates on these SIs have already taken place both in this House and in the House of Commons. This SI is part of that programme. It will fix deficiencies in retained EU legislation relating to packaged retail and insurance-based investment products, or PRIIPs, to ensure that it continues to operate effectively post exit. The approach taken in this legislation aligns with that of other SIs being laid under the EU withdrawal Act, providing continuity by maintaining existing legislation at the point of exit but amending it where necessary to ensure that it works effectively in a no-deal context.

I turn to the substance of the SI, which amends the PRIIPs regulation. PRIIPs are investment products offered to retail investors and considered as an alternative to, for example, depositing cash in a savings account. They include financial products such as investment funds, life insurance policies that have an investment element, derivatives and structured investment products. As such, PRIIPs are primarily sold by asset managers, insurers and banks.

The EU PRIIPs regulation introduced a standardised disclosure document called a key information document, or KID, to be provided when a PRIIP is advised on or sold to retail investors. It came into application on 1 January 2018. The PRIIPs regulation aims to make it easier for retail investors to compare similar financial products by requiring certain information about the product, such as the risks, performance scenarios and costs, to be disclosed in a standardised way on the KID. In a no-deal scenario, the UK would be outside the EU and outside the EU’s legal, supervisory and financial regulatory framework. The retained PRIIPs regulation therefore needs to be updated to reflect this and to ensure that the provisions work properly in a no-deal scenario.

Moved by

Leave out from “that” to the end and insert “this House declines to approve the draft Regulations because no consultation has been undertaken despite Her Majesty’s Government’s economic assessment indicating transition and associated costs will be significant.”

I have nothing to add to my remarks on the previous regulations. The issues are exactly the same, regarding consultation and the conduct of assessments.

When I read the SI with care, it seemed straightforward and to do its work. I was seeking to see if there was any new policy, and the new policy that I discovered was the Venezuela point. I hope the Minister will be kind enough to write to me explaining whether “all countries” has that worldwide application and why the Treasury does not perceive that there is any danger in such an extension. Other than that, I am entirely content for this SI to go through.

I am happy to give the noble Lord that assurance; I will write and be clear on that question. I thank the noble Lord, Lord Adonis, for not pressing his amendment.

I beg leave to withdraw the amendment.

Amendment to the Motion withdrawn.

Motion agreed.