Retail investment regulations
The Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs) came into force on 1 January 2018.
It aims to increase the transparency and comparability of investment products through the issue of a standardised short-form disclosure document, the PRIIPs Key Information Document (KID).
The regulation is intended to make it easier for retail investors to understand and compare the key features, risk, rewards and costs of different products in scope of PRIIPs through the provision of the KID.
The KID is a free-of-charge pre-contractual, stand-alone document that is to be shared with the investor prior to the conclusion of any transaction.
The regulation applies to PRIIPs products and services purchased by an EEA Resident Retail Investor, regardless of their nationality.
The regulation is applicable worldwide, no matter where a PRIIP is purchased, as long as it is purchased by an EEA Resident Retail Investor.
Previously 22 November
Tim Mortimer, managing director at Future Value Consultants, explains how the requirement for asset managers to display future performance simulations on their fund literature under PRIIPs regulations has created problems.
Allow time for clarifications
Providers could require more time
Concerns over presentation of costs and charges
Parliament to debate directive next week
Successful motion passed in EU last week
Concerns over projection of future performance
There are some long-standing practices in the asset management industry which are clearly ripe for review. However, removing past performance data from key funds documents appears a dangerous step and one likely to create worse outcomes for consumers....