On Friday 8 February, the three European supervisory authorities (ESMA, EBA, EIOPA) published a recommendation not to amend, at this stage, the technical standards detailing the key information document (KID) for retail investment products.
This recommendation was taken in the light of an earlier consultation on possible amendments (see EUROPE 12134) and a “possible decision” by the European Co-legislators to postpone the application of the KID document for UCITS investment funds until after 2021.
The three European authorities undertake to carry out an in-depth evaluation of the KID document in 2019 and to propose new technical standards this year. In particular, the evaluation will focus on the methodology used to calculate the future performance of the retail investment product.
Based on Delegated Regulation (2017/653), the KID document aims to provide a non-professional investor with key information on the performance of a retail financial product. Written in the form of a three-page summary, and in an understandable manner, the intention is for the investor to be able to compare different products and make an informed choice.
The technical standards detailing the KID document contain: - a mandatory template; - a summary risk indicator identifying seven risk categories; - a methodology for classifying each retail financial product into one of these seven categories; - requirements for performance scenarios; the presentation of investment costs. They also establish requirements for regular revisions of the KID document.
The final recommendations can be seen here: http://bit.ly/2BwgXf7. (Original version in French by Mathieu Bion)