"Nevertheless, [we] took note of the concerns raised following the implementation of the performance scenario methodology to the range of different types of Priips, and started to consider the relevance of amendments to the approach."
The consultation is open for one month, with the EU stating the need to get the work done before the European parliament elections next year, which means it has less time than it would like to be able to complete the work.
The Association of Investment Companies (AIC) said the current Kid rules should be suspended immediately until the new rules are introduced.
Ian Sayers, chief executive, said: "Given that it took over 10 years to get where we are today, it is unrealistic to expect that the problems with Kids can be resolved in 10 weeks.
"The proposals may be a step in the right direction, but fail to address the fundamental flaw of using past performance to predict the future. The proposed changes look too technical for ordinary investors and do not address our concerns about the understatement of risk.
"The proposals demonstrate why the Kids rules should be suspended to allow time to fix the problems properly and permanently. Otherwise, we will just be back here again in 12 months’ time."
Laura Suter, personal finance analyst at investment platform AJ Bell, said: "Many parts of the industry have called for Kids to be changed and it’s disappointing that this latest consultation is attempting to rush through changes before European parliament elections next year, which has severely limited the scope of the changes."
Francis Klonowski, an adviser at Klonowski and Co in Leeds said he would not typically read a Kid document before recommending a trust, as he focuses on the performance achieved as his expectations for the future.
david.thorpe@ft.com
