EUROPEAN UNION: European Commission Adopts New Rules on the Key Information Document

Thursday June 30 2016

The European Commission today adopted new rules specifying the content and underlying methodology of the so-called Key Information Document (KID) that will have to be provided to retail consumers when they buy certain investment products, as of 31 December 2016. These include asset management products and other “packaged” investment products sold by banks or insurance companies.

The KID, introduced by the Regulation on Key Information Documents for Packaged Retail and Insurance-Based Investment Products (PRIIPS), is a standardised document which is designed to present the main features of an investment product in a consumer-friendly manner, allowing consumers across the EU to compare investment-linked insurance policies, investment funds and investment products.

Today’s Regulatory Technical Standards (RTS) specify the exact contents of the KID: it must outline the product’s aims, how risky it is, when investors can get their money back, how much it costs and its expected returns. All of this information must be set out in a standard way, regardless of the type of investment product.

The European Parliament and Council now have a two-month scrutiny period, which they can extend for a further month.

Please click on the above link for the full text of the delegated regulation.