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In March 2022, the European Union (EU) Commission published Regulatory Technical Standards (RTS) ‘quick fixes’ in order to align their application date with the new expiry date of the UCITS exemption (31 December 2022). These relate to Article 14(2) of the Delegated Regulation (EU) 2017/653 and Article 2 of the Delegated Regulation 2021/2268.
Once voted by the EU Parliament and Council within a three months period, the RTS quick fixes will be published in the Official Journal of the EU.
Please refer to “PRIIPs in short” at the bottom of page or to our regulatory memo for an in-depth view: Packaged Retail and Insurance-Based Investment Products (PRIIPs) – regulation memo
The PRIIPs Key Information Document (KID) requirements
PRIIPs manufacturers or issuers must draw up a Key Information Document (KID) for each product in scope. The company has to publish on its website the KID prior to the financial product being made available to retail investors.
The KID is to be a clearly worded three-page document that provides investors with a simple overview of the most important features of the product they are buying, including a general description, cost, risk profile and possible performance scenarios.
Any distributor or financial intermediary who sells or provides advice about PRIIPs to a retail investor or receives a buy order on a PRIIP from a retail investor must provide the investor with a KID.
PRIIPS impacts on fund managers, distributors and financial intermediaries
1 January 2023 is the next milestone for the PRIIPs KID exemption for UCITS and the implementation of the PRIIPs KID.
In addition to condensing the main features of the product into a restricted space, the main challenges for PRIIPS manufacturers will be to determine and review on a regular basis:
- The four future performance scenarios
- The summary risk indicator
- The costs indicator, which includes implicit transaction costs
How can we help?
Since the very beginning of PRIIPS implementation, we have been supporting our Asset Manager clients in their obligation to produce numeric components and reports.
In 2022, we have upgraded our KID production solution as well as the Transaction Costs Calculation “Full PRIIPs” method to meet the new regulatory requirements.
Our Regulatory Reporting team is ready to assist clients in efficiently transitioning from the UCITS1 KIID2 to PRIIPs KID. We can also support with updated versions of templates such as European MiFID Templates (EMT) and European PRIIPs Templates (EPT).
PRIIPs in short
The PRIIPs regulation aims to improve retail investor protection by:
- Providing basic pre-contractual information via the introduction of the Key Information Document (KID)
- Improving the quality and comparability of information on the key features of investment products (in particular on risk, performance and costs)
The PRIIPs regulation came into effect on 3 January 2018. On 7 September 2021, the Commission adopted a Delegated Regulation amending the current PRIIPs RTS.
On 20 December 2021, the following amendments were published in the Official Journal:
- To the PRIIPs Regulation to extend to 31 December 2022, the UCITS exemption from providing a Key Information Document (KID) under the PRIIP regulation.
- To the UCITS Directive to avoid the duplication of pre-contractual disclosures to retail investors through the PRIIPs KID and UCITS Key Investor Information Document (KIID) from 1 January 2023.
1 – Undertakings for the collective investment in transferable securities
2 – Key Investor Information Document