Packaged Retail Investment and Insurance-based Products
Regulation No. 1286/2014 of the European Parliament entered into force on 1 January 2018.
This regulation aims to enable retail investors to better understand and compare the key features, risks, rewards and costs of specific financial products.
The product manufacturers and distributors are required to provide their retail clients with a standardised short document – the PRIIPs Key Information Document “KID” – in principle prior to the conclusion of the transaction.
On a maximum of 3 pages, the KID must provide a view at least on:
- The manufacturer of the product
- The target market of the product and types of potential investors
- The product’s risk and reward profile based on different scenarios and including maximum loss
- Details about the costs
The regulation applies to PRIIPs products purchased by European Economic Area domiciled Retail Investors, regardless of their nationality.