A one year delay until 1 January 2018 was supported by 23 of the Council's 28 members, those members said in a statement.
Last week, the European Parliament rejected the draft Regulatory Technical Standards (RTS) developed by the European Commission. The legislation is "so flawed and misleading" that it is likely to cost investors money, the Parliament said.
The proposed RTS that investment providers must meet to provide greater transparency and clarity to investors are inadequate, the Parliament said.
The RTS lay out the information that must be given to retail investors in packaged investment products with an equity element. Key information documents (KIDs) containing standardised product information in a consumer-friendly format must be made available for all PRIIPs.
In a statement, the Council members said: "We fully support the EU-wide introduction of KIDS for retail investors. We believe it is important [the] PRIIPs regulation is fully applied and it is essential to meeting the needs of EU citizens. After the rejection of the PRIIPs RTS by the European Parliament, we call on the Commission to consider postponing only the application date of the PRIIPs regulation."
"In our view, the Commission should propose a postponement of the application date by 12 months in order to provide sufficient time to clarify open questions and reach the goals of the PRIIPs regulation," they said.
The 23 countries which back the delay are: Germany, the United Kingdom, France, Austria, Croatia, Sweden, Ireland, Slovenia, Lithuania, Cyprus, Romania, Finland, Denmark, Portugal, the Netherlands, Malta, Estonia, Hungary, Greece, Belgium, Bulgaria, Latvia, Czech Republic and Slovakia.
Insurance expert Chris Riach of Pinsent Masons, the law firm behind Out-Law.com said "A delay now seems to be the most sensible way forward as introducing the regulation without the technical standards will pose risks to both firms and investors. A delay of one year will not only provide some time for the revision of the technical standards, but will also realign the implementation date of the regulation with MiFID II, alongside which it was originally proposed and with which there is some overlap."