2023 PRIIPs II KIDs amendments

Firms that in the EU manufacture, sell or advise on PRIIPs “Packaged Retail and Insurance-based Investment Products“ must provide retail investors - and in some cases, by 2023, also non-retail investors - with a three page KID “Key Information Document”.

KIDs have been regulatory enforced since 2018 and we (Qvonto) have been producing thousands of PRIIPs KIDs for our clients during this time period.

The EU has decided some 2023 regulatory changes to the presentation and content of the KID. Here are some main parts:

• “new methodologies underpinning the calculation of appropriate performance scenarios and a revised presentation of these scenarios, to ensure that retail investors do not have inappropriate expectations about the potential return on investment they may receive;

• revised summary cost indicators and changes to the content and presentation of information on the costs of PRIIPs to help retail investors better understand the different types of cost structures, as well as to facilitate the use of this information by persons selling or advising about PRIIPs;

• a modified methodology underpinning the calculation of transaction costs to address practical challenges that have arisen [previously] when applying the existing rules and issues regarding the application to certain types of underlying investments;

• modified rules for PRIIPs that offer a range of options for investment to ensure more clarity of the information on their cost implications;

• new technical standards on information on past performance, which is to be provided by certain types of undertakings for collective investment in transferable securities (UCITS), retail alternative investment funds (AIFs), and insurance-based investment products. The actual past performance will not be included directly in the KID but via a reference (e.g. a website link) in the KID.”