11 November 2015

ESAs consults on PRIIPs Key Information Documents

The KID aims to provide EU retail investors with consumer-friendly information to enable retail investors to understand and compare PRIIPs across the EU, whether offered by banking, insurance or securities firms.

Steven Maijoor, Chair of the Joint Committee, said: “Today’s consultation is a major step forward for the EU’s retail investors by setting out clear proposals on the contents of the KID, which are aimed at improving safeguards and transparency around investment products. The proposals have benefited from the input that the ESAs have received to two previous Discussions Papers, extensive consumer testing across a sample of EU Member States and a consultative expert group. The KID, once implemented, aims to safeguard retail investors’ interests by ensuring they receive sufficiently clear, concise and understandable information to allow them to make better informed investment decisions.”

The Consultation Paper sets out details on the proposed requirements to be included in the preparation of the KID, these include:

• a common mandatory template for each KID, including the texts and layouts to be used;
• a summary risk indicator of seven simple classes for the risk and reward section of the KID;
• a methodology to assign each PRIIP to one of the seven classes contained in the summary risk indicator, and for the inclusion of additional warnings and narrative explanations for certain PRIIPs;
• details on performance scenarios and a format for their presentation, including possible performance for different time periods and at least three scenarios;
• costs presentation, including the figures that must be calculated and the format to be used for these i.e. in both cash and percentage terms;
• specific layouts and contents for the KID for products offering multiple options that cannot be effectively covered in three pages;
• the revision and republication of the KID, to be done at least annually; and
• the KID must be provided sufficiently early for  a retail investor to be able to take its contents into account when making an investment decision.

The ESAs will also hold a Public Hearing on KID for PRIIPs in Frankfurt on 9 December in support of this consultation. The closing date for stakeholder input is 29 January 2016.

Consultation paper

Press release

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