ESA Joint Committee · priips-56 Final

In case a PRIIP is a fund of funds, where the underlying investment is a fund which is in turn investing in another fund, should we consider the funds in which the PRIIP is investing in directly as th

Regulation
PRIIPs
Answered
2017-07-04
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

In case a PRIIP is a fund of funds, where the underlying investment is a fund which is in turn investing in another fund, should we consider the funds in which the PRIIP is investing in directly as the underlying investments, or should look through to the underlying exposures, for the credit risk assessment?

Answer

In the case of fund of funds it is necessary to look-through the different levels of funds to identify the underlying exposures. This does not mean that a credit risk assessment is necessary for all underlying investments or exposures. Point 34 of Annex II, Part II stipulates that the underlying investments or exposures of a fund shall be assessed “where necessary”. “Where necessary” refers to whether those underlying investments or exposures entail credit risk as described in Points 30-36 of Annex II, Part 2, for example, whether the investment represents more than 10% of the total assets or value of the PRIIP.
View original on ESA Joint Committee (EBA, ESMA, EIOPA) ↗

This Q&A is published by ESA Joint Committee (EBA, ESMA, EIOPA) and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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