The Regulation on Key Information Documents for Packaged Retail and Insurance-based investment products ("PRIIPs") is of interest to a range of stakeholders, such as fund managers, insurance undertakings, credit institutions, and investment firms, involved in the manufacture or distribution of investment schemes and other packaged products in the retail market. It will change the way that firms present and provide product information to clients.

PRIIPS sets out uniform rules on the format and content of the key information document and on the provision of such documents to retail investors to allow them to understand and compare key features and risks inherent in a PRIIP.

The key areas include:

  • Before a product can be sold to retail investors, PRIIP manufacturers will need to produce a key information document for their products and ensure such information is accurate, fair, clear and not misleading. It is to be available on their website and must follow a prescribed format and include prescriptive information;
  • Persons advising on or selling PRIIPS are required to provide the key information document in good time before any transaction is concluded. There are some small allowances on this point for distance communications. Firms may use electronic formats but the investor has the right to ask for paper. This must always be offered free of charge; and
  • The PRIIPS does not introduce or change any passporting provisions allowing for the cross-border sale or marketing of PRIIPS to retail investors.

The PRIIPS Regulation (1286/2014/EU) was published in the EU's Official Journal on 9 December 2014 and it comes into force 20 days after that. As a regulation it is directly applicable so EU Member States do not need to take steps to implement the PRIIPS measures in their national legislation. It shall apply from 31 December 2016.

We have set out the prescribed format and infomation requirements for the key information documents and a suggested aproach.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.