On 22nd December 2022, the Malta Financial Services Authority (the "MFSA") issued a circular on the applicability of Regulation (EU) No 1286/2014 (the "Regulation") on Key Information Documents for Packages Retail and Insurance-based Investment Products ("PRIIPs").
By way of background, on 1st January 2018, the Regulation introduced the key information documents for PRIIPs ("PRIIPs KID") for all packaged retail and insurance-based investment products made available to retail investors in the European Economic Area (EEA), in order to provide retail investors with the information necessary to make an informed investment decision. It provides that PRIIPs KIDs need to be simple enough for retail investors to assess and compare products, and thus must include, inter alia, (i) the nature and features of the product, including whether it is possible to lose capital, (ii) the costs and risk profile of the product, and (iii) relevant performance information.
Units in undertakings for collective investment in transferable securities ("UCITS") and alternative investment funds ("AIFs") constitute PRIIPs for the purposes of the Regulation. However, UCITS management companies and self-managed UCITS were exempt from the requirements of the PRIIPs Regulation through Directive 2021/2261 as regards the use of key information documents by management companies of UCITS. However, following the publication of Commission Delegated Regulation (EU) 2022/975 of 17 March 2022, as of 1 January 2023, the Regulation will also apply to UCITS management companies and self-managed UCITS who also offer PRIIPs to retail investors.
UCITS management companies, self-managed UCITS and where applicable alternative investment fund managers (AIFMs), and self-managed AIFs (collectively, the "Licence Holders") are required to produce a PRIIPs KID as specified in the Regulation. This shall, in turn, be distributed to the retail investors in good time prior to entering into any contract. Licence Holders already offering PRIIPs to retail investors should file the PRIIPs KID with the MFSA within 35 business days of 1 January 2023. On the other hand, PRIIPs KIDs submitted as part of a new application should be submitted through the LH Portal together with all other application documents.
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