On 7 April 2016, the Joint Committee of the European Supervisory Authorities published its final draft regulatory technical standards (RTS) on key information documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs) under the PRIIPs Regulation.
The draft RTS include:
- A mandatory template which includes mandatory text and the layout.
- A methodology for the assignment of each PRIIP to one of the seven classes in the summary risk indicator.
- Requirements for the presentation of costs.
The press release notes that that the three-page document should increase the transparency and comparability of information about the risks, performance and costs of PRIIPs. The draft RTS have been submitted to the European Commission for endorsement and will enter into force on 31 December 2016. The European Supervisory Authorities are also developing supporting material to the draft RTS. These requirements will not apply to UCITS until 31 December 2019 at the earliest.
Under Article 32 of the PRIIPs Regulation, UCITS Mancos and SMICS and persons advising on, or selling, units of UCITS shall be exempt from the obligations under this PRIIPs Regulation until 31 December 2019. Also, where a member state applies rules on the format and content of the key information document, as laid down in UCITS Directive, to non-UCITS funds offered to retail investors, this exemption will apply (the Central Bank does not currently require retail AIFs to issue a document equivalent to a UCITS KID).
Under Article 33, the PRIPs Regulation will be subject to review. For UCITS, the review shall assess whether the transitional arrangements under Article 32 of the PRIPs Regulation shall be prolonged, or whether, following the identification of any necessary adjustments, the provisions on key investor information in the UCITS Directive might be replaced by or considered equivalent to the key investor document under this Regulation.
In practice, where UCITS are wrapped into insurance products, they may be required to provide supplementary information or data to enable the underlying insurance company to produce the PRIIPs KID ahead of 31 December 2019.