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The new 3 pager

· Regulatory update,PRIIPS,Financial promotion

The new European Regulation that requires a 3 page Key Information Document (KID) for investment and investment products sold to retail investors.

Quick snapshot

Stands for: Packaged Retail and Insurance-based Investment Products Regulation

Implementation: 31 December 2016

Who's affected: Producers, providers and distributors of retail investment and insurance products, include all AIFMs. It may even impact intermediaries who are not regulated.

The background

The purpose of PRIIPs is to help investors across Europe to understand and compare the key features of different investment and insurance products.

Below is a non-exhaustive list of investment which are caught by the definition of a PRIIP:

  • all Alternative Investment Funds (AIFs) (including VCTs, PE/ VC funds, investment trusts, OEICs and AUTs)
  • securities issued by certain Special Purpose Vehicles (SPVs) 
  • structured deposits
  • structured investment products
  • derivatives (including options, futures, and contracts for differences)
  • many insurance-based investment products (including unit-linked policies and with-profits policies)

UCITS funds will also need to comply with the rules by 31 December 2019.

While the official implementation date for PRIIPs remains 31 December 2016, we will have greater certainty on this following a debate in Brussels on 9 November. At the moment, one important component of the plan, the Regulatory Technical Standards (more on this below) is caught in a legislative logjam that dates back to August, when MEPs voted to reject the draft. November's debate can be expected to clarify whether PRIIPs goes ahead either in full or in part, or is postponed until the beginning of 2018.

For a full discussion of uncertainty over timescales, see our other post, here.

The impact


Every KID will contain the following information, in a prescribed format and order:

  • What is this product?
  • What are the risks and what could I get in return?
  • What happens if the PRIIP provider is unable to pay out?
  • What are the costs?
  • How long should I hold it and can I take money out early?
  • How can I complain?

The Regulatory Technical Standards set out in detail how to calculate and present each piece of information.


Retail investors will need to be provided with the 3 page document in good time before the transaction is concluded.

Where there has been no face-to-face contact with the investor (i.e. for 'distance communications'), the document can be provided after the sale but the investor must agree to this and must be allowed to delay the contract until they have received it.

Action to take

A KID will need to be produce for each product caught by the PRIIPS regulation by 31 December 2016. 

We are recommending the clients start work on their new documentation by October 2016, given that there may be challenges in gathering the prescribed information and calculations.

We've started working with firms to identify which products will be affected by the new Regulation, and how to make best use of the template.

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