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ESA Publishes further Guidance on PRIIPs KID

30th July 2018

ESA Publishes additional PRIIPs KID Guidance

Just over a week ago, on 20th July 2018, the European Supervisory Authorities (ESAs) published further guidance on the Key Information Document requirements for PRIIPs (Packaged Retail and Insurance-based Products)

This guidance supplements those materials published last year prior to PRIIPs KID implementation and aims to promote common supervisory approaches and practices based on ongoing work to monitor the implementation of the KID. Included within this newly published guidance are:

To view the guidance supplements please click here.

What is the KID?

The KID is a mandatory three page A4 information document that has to be provided to consumers before purchasing a PRIIP. This document provide key information to consumers about the features of a product including what they might gain if they invest and what the associated risks and costs are.

It has been mandatory for KIDs to be provided for any PRIIP since the start of this year.

Following PRIIPs KID implementation on 1st January 2018, the FCA also gave subsequent guidance and information for manufacturers and providers of PRIIPs relating to the KID content on performance scenarios.

ESA’s Latest PRIIPs KID Guidance

So, what does ESA’s latest PRIIPs KID Guidance detail? Well, as well as providing updated flow diagrams for the risk and rewards calculations, ESA have also published additional questions and answers providing guidance to those needing to comply with PRIIPs Regulation.

Such questions include:

“Does the KID need to be published on the public section of a website? The answer to which is “Yes, in order to comply with the obligation laid down in Article 5(1) of the PRIIPs Regulation, a PRIIP manufacturer must publish a KID on the public section of its website. As reasoned in Recital 12 of the PRIIPs Regulation, the publication ensures widespread dissemination and availability of KIDs.”

If the recommended holding period (RHP) of the PRIIP is less than one year, how should performance and cost figures be presented in the KID?”; And

In relation to Calculation of the summary cost indicators, If the moderate scenario shows a total loss of capital or even a negative return, should this be used to present the costs, in which case the Reduction-in-Yield would suggest no or very low costs?”

All the answers to these questions and more can be found in ESA’s newly published guidance.

PRIIPs KID Support:

To find out more about the content, presentation and calculation of content to be included within a PRIIPs Key Information Document (KID) or to discuss any questions you may have about how the PRIIPs Regulation affects you, please contact our experienced regulatory consultants.

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PRIIPS KID Regulation

PRIIPs KID Regulation has been effective since 1st January 2018

N.B. UCITs have a five year exemption in which to comply by 31st December 2019.