March 31, 2016 |
Company | Front | KIID | News | Platform | etfinfo |
Packaged Retail and Insurance-based Investment Products (PRIIPs) is a term that applies to numerous financial products which are sold to retail investors. As of 1 January 2017, a new EU standard concerning PRIIPs comes into effect: the PRIIPs Key Information Document (“PRIIP KIDs”).
Because PRIIPs products can be complex, they are often difficult for retail investors to understand and compare. To address this issue and help protect investors, the European Parliament passed a regulation requiring all PRIIPs “manufacturers” to prepare and publish a KID for each PRIIP they produce for sale in the EU.
UCITS Asset Managers take heed! The requirement to publish a PRIIP KIDs will also apply to UCITS fund managers by December 2019. Although this may seem a long way off, once the PRIIPs KID rules are set by end of 2016, they are unlikely to change. For UCITS asset managers, this means taking part in defining the new document standard now, or face difficulties when replacing UCITS KIDS with PRIIPs KIDs in 2019.
What is a PRIIPs KID? A PRIIPs KID is a stand-alone, non-marketing, standardised document up to a maximum of 3 sides of A4-sized paper. It promises to be a positive development for the asset management industry by allowing EU investors to more easily compare investment products and help level the playing field between asset managers, banks, and insurers. Each KID will need to include the following information:
What is this product?
What are the risks and what could I get in return?
What happens if the PRIIP manufacturer is unable to pay out?
What are the entry, recurring and exit costs?
How long should I hold it and can I take money out early?
How can I complain?
In anticipation of this new reporting requirement, fundinfo’s fund document platform is being adapted to accommodate the new PRIIPs KID document. By the end of 2016, fundinfo’s publication and dissemination services will be expanded to included PRIIPs KIDs. The document will be available as PDF download, exactly as existing documents such as KIIDs, Prospectus and Monthly Factsheets are already available on www.fundinfo.com.