On 8 July 2009, the Committee of European Securities Regulators (CESR) published for consultation its draft advice to the European Commission on the format and content of key investor information disclosures for UCITS.
CESR’s proposals follow over two years of work which have included extensive consultation with stakeholders. In developing its draft advice, CESR has also placed great emphasis on the outcome of the consumer testing exercise carried out by the Commission. The proposed disclosure, to be known as the Key Information Document (KID), will replace the current Simplified Prospectus that was introduced in 2002 and aims at increasing investor protection and convergence across Europe.
The deadline for comments on the draft advice is 4 September 2009.
When CESR published the consultation paper setting out its draft advice, it had not yet finalised some elements of the proposed methodology. In particular, the proposal still needed to be fine-tuned with respect to:
- The definition of upper and lower bounds for the volatility intervals.
- The detailed explanation of the risk classification process for structured funds.
On 4 August 2009, CESR published an addendum which complemented the consultation paper by including an explanation of CESR’s proposals on the above issues.