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CESR published a consultation paper on the content and form of Key Investor Information disclosures for UCITS. CESR makes specific recommendations on a number of points, while in some areas proposes alternative options where testing on retail investors is required to understand better how retail investors react to particular approaches.
CESR recommends that KII should contain only the essential elements for making and carrying out investment decisions, which excludes information serving only legal or regulatory requirements.
The KII should be a single document covering a maximum of two sides of A4, unless unusual features preclude this.
CESR’s proposals for risk-reward outlines two broad options: i) the inclusion of a synthetic risk-reward indicator (SRI) or ii) improved narrative disclosure.
Past performance should include that the information be presented using bar charts; percentages should be preferred to cash figures; and the performance of the benchmark should be shown, if the fund is managed against one.
CESR finally proposes two options for consumer testing – the first an improved version of the existing SP disclosure, the second supplementing this information with a single ‘summary’ figure.
CESR will deliver its advice to the Commission until February 2008. The Commission will then carry out market testing throughout 2008. CESR will then finalise its advice by March 2009.
CESR will hold an Open Hearing on
Deadline for responses is