ITALY: Consob issues guidelines for preparing the offer documentation for Italian open-ended UCITS

Tuesday June 3 2014

Consob has published a communication which formulates guidelines for preparing the offer documentation (prospectus and KIID) for Italian-law open-ended UCITS, in accordance with the current regulations on the subject of transparency and in line with the specific features of the Italian asset management market.

The KIID (Key Investor Information Document) is a summary document, containing the ‘key information’, aimed at enabling investors to more easily understand the nature and associated risks of investments in units or shares of UCITS.

The ‘key information’ must be in keeping with the more detailed data presented in the prospectus of the UCITS. Clarity and transparency of information contained in the KIID, and its consistency with the prospectus, are essential elements in the light of the fact that the KIID is the only document which it is obligatory to present to the investor.

From the supervisory analyses carried out it emerged that the offer documentation for open-ended UCITS is generally compliant with the legislative provisions on the subject. Areas for improvement have, however, been identified with particular reference to the description of the investment objectives and policy of UCITS, above all regarding the KIID.

The KIID is divided into three sections: (a) investment objectives and policy, (b) risk and return profile, (c) expenses and (d) results obtained in the past. Communication No. 0045188 of 29 May 2014 illustrates the elements needed to overcome the issues that emerged during the supervisory analyses for each section.

For the purposes of correct disclosure transparency, broker managers are invited to assess the need to adjust the offer documentation within the terms illustrated in the communication.

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