EBA, ESMA and EIOPA (the European Supervisory Authorities – ESAs) are consulting on draft RTS on the layout of the Key Information Document (KID) to be used under the Packaged Retail and Insurance-based Investment Products (PRIIPS) Regulation. The RTS cover:
- the presentation and content of the KID, including methodologies for the calculation and presentation of risks, rewards and costs within the document;
- the review, revision, and republication of KIDs; and,
- the conditions for fulfilling the requirement to provide the KID in good time.
The consultation sets out details on the proposed requirements to be included in the preparation of the KID, including:
- a common mandatory template for each KID, including the texts and layouts to be used;
- a summary risk indicator of seven simple classes for the risk and reward section of the KID;
- a methodology to assign each PRIIP to one of the seven classes contained in the summary risk indicator, and for the inclusion of additional warnings and narrative explanations for certain PRIIPs;
- details on performance scenarios and a format for their presentation, including possible performance for different time periods and at least three scenarios;
- costs presentation, including the figures that must be calculated and the format to be used for these i.e. in both cash and percentage terms;
- specific layouts and contents for the KID for products offering multiple options that cannot be effectively covered in three pages;
- the revision and republication of the KID, to be done at least annually; and
- the KID must be provided sufficiently early for a retail investor to be able to take its contents into account when making an investment decision.
The paper also includes feedback on previous discussion papers and annexes the results of the Commission’s consumer testing survey on KID format and content. There will be a public hearing in Frankfurt on 9 December and consultation closes on 29 January 2016. (Source: ESAs consult on PRIIPS KID)