By 1 January 2018 insurers, banks, asset managers and other investment firms offering packaged retail investment and insurance-based products (PRIIPs) must make a key information document (KID) available for all products offered to customers. On 18 August 2017 the European supervisory authorities (ESAs)—made up of the European Insurance and Occupational Pensions Authority (EIOPA), the European Securities and Markets Authority (ESMA) and the European Banking Authority (EBA)—published an updated questions and answers (Q&A) document on the PRIIPs KID. The first batch of Q&As was published in July.
The ESAs’ publication is aimed at clarifying aspects of the Regulatory Technical Standards (RTS) or ‘Level 2’ rules covering the specific form and content of KIDs. The latest questions addressed by the ESAs include queries on the following:
• Categorisation of a retail investor
• Market risk assessment
• Credit risk assessment
• Summary Risk Indicator (SRI)
• Presentation of costs
The combined set of Q&As, covering the first and second batch of queries, can be found here.
In addition to the latest Q&A document, the ESAs also published a useful flow diagram or decision tree showing how to perform the various calculations for the SRI and performance scenarios. This is a graphical view of the requirements set out in the RTS and a useful summary of the basic calculations. The flow diagram can be found here.
The ESAs stated they will continue to assess whether further guidance is needed based on additional questions received.
Please contact us if you have any questions or comments on PRIIPs. We would be happy to meet with you to discuss ways in which we can help you achieve a successful PRIIPs implementation including gap analysis, KID production, checking overall compliance with the PRIIPs requirements and review of KID elements, including narratives and numerical disclosure tables, etc.