The European Commission proposed on Tuesday 7 September a delegated regulation on the elements to be included in the document (‘PRIIPs KID’) identifying the key information (costs, risks, potential benefits) that an investor should have in order to make an informed choice when purchasing a retail financial product.
In particular, the proposed regulation sets out new methodologies for calculating performance scenarios to ensure that retail investors do not have inappropriate expectations about the potential return on their investment, says the draft text sent to the EU Parliament and EU Council.
Compiled in a single document, the ‘PRIIPs KID’ will cover the main retail financial products, including UCITS investment funds, life insurance products and structured finance products.
“The current practice, whereby retail investors receive two types of retail investment information documents depending on whether they are buying an investment fund product or another type of retail investment, can make it difficult to compare products, particularly with regard to risks or costs. That is why we are simplifying the rules to bring them under one umbrella: the PRIIPs Key Information Document”, said EU Financial Services Commissioner Mairead McGuinness in a statement.
The new rules would apply from July 2022 to coincide with the entry into force of simplified rules for the ‘PRIIPs’ Regulation and the ‘UCITS’ Directive. Until then, a transitional regime is in place (see EUROPE 12764/17).
See the proposal for a delegated regulation: https://bit.ly/3n820s7 (Original version in French by Mathieu Bion)