2019-09-19

Supervisory Treatment of Individual Features of Corporate Bonds Under the PRIIPs Regulation

BaFin’s Securities Supervision issued this guidance notice to clarify how corporate bonds are classified as packaged retail investment products (PRIPs) under the PRIIPs Regulation. The notice mandates a case-by-case assessment of specific bond features, determining that perpetual, subordinated, and fixed-rate bonds generally fall outside PRIP scope, while those linked to reference values or conversion rights are typically included. It further specifies that direct links to interest rate indices and issuer-related reference values do not trigger PRIP classification, whereas non-index references or additional structuring require inclusion.

Germany

Federal Financial Supervisory Authority Germany

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