The Official Journal of the European Union published on 9 December 2014 the new Regulation on the Key Information Document of the Packaged Retail and Insurance-based Investment Products. Its application is envisaged for the 31 December 2016.

The Regulation on the Key Information Document (KID Regulation) shall be applicable for any investment product targeted for retail investors (no matter its form or structure) as long as the return for the retail investor is subject to fluctuation in the performance of one or more underlying assets or reference values. Therefore, those insurance-based product which do not offer an opportunity to invest and deposits exclusively subject to fluctuation on interest rates are completely excluded from its scope of action.

The main purpose of the Regulation is to grant that the information on the packaged retail investment products is precise, impartial, clear and not misleading. In this regard the KID Regulation establishes several rules to follow while drafting the KID so as to make sure that the information received by the retail investors is comprehended. The main reason for this new Regulation to be adopted was the same that inspired all the last amendments to MIFiD Directive: avoiding the possible lack of knowledge of the retail investors while contracting an investment product.

The KID Regulation gives a lot of importance to the vocabulary to use in the information provided to investors. The Regulation acknowledges that in the vast majority of the cases, the insurance-based investment products are sold to investors whose financial knowledge is very limited. In this regard, the Regulation even envisages each of the subtitles that the KID must contain. It is as well established that the KID shall have a standard format so that it is easily recognizable and that permits the comparison of the different packaged retail investment products.

The text itself envisages the revision of the Regulation on 31 December 2018 so as to be able to analyze if a new Regulation is needed.