The European Commission has adopted a Delegated Act supplementing the Regulation on key information documents for packaged retail and insurance-based investment products (the PRIIPs Regulation). The Delegated Act introduces regulatory technical standards (RTS) specifying the content and underlying methodology of the so-called Key Information Document (KID) that will have to be provided to retail consumers when they buy certain investment products.
Articles 1 to 8 of the RTS address the different sections of the KID set out in Article 8(3) of the PRIIPs Regulation, and the underlying methodologies necessary for obtaining and calculating information to be included in the KID, for instance in relation to risks, rewards and costs.
Article 9 of the technical standards requires the use of a mandatory template, including mandatory texts. The template includes details of the layout that must be followed.
Articles 10 to 14 of the RTS set out specific requirements for the content of the KID for PRIIPs offering a range of options for investments, where including all of the information required for each of the options would not be possible in a single standalone KID.
Articles 15 and 16 of the RTS sets out requirements on the PRIIP manufacturer for the review and revision of the KID, as required under Article 10 of the PRIIPs Regulation, whereby this shall be done annually. Article 14 also sets an obligation to conduct ad hoc revisions where necessary under the detailed methodologies for calculating the summary risk indicator, the performance scenarios and the costs, as well as for products offering multiple options.
Article 17 of the technical standards sets out obligations for the person selling or advising on the PRIIP, as required under Article 13 of the PRIIPs Regulation, whereby the KID will be provided sufficiently early so as to allow retail investors to take its contents into account when making an investment decision. The timing of the delivery of the KID may vary depending on the PRIIP in question and the needs of the retail investor.
