Packaged Retail and Insurance-Based Investment Products

What is key information document (KID) for packaged retail and insurance-based investment products (PRIIPs)?

The KID is a mandatory, three-page A4 information document to be provided to consumers before purchasing a PRIIP. PRIIPs include for example funds, structured products, unit-linked and with-profits life insurance contracts, and structured deposits.

The aim of the KID is to provide the European Union's consumers with consumer-friendly information about the key features of investment products, including on what they might gain if they invest, the risks they are taking, and all the costs they will have to incur with the ultimate aim of improving transparency in the investment market.

The KID will need to be provided by those who produce or sell investment products to consumers from 1 January 2018.

Rules for the KID

The PRIIPs Regulation defines the main rules and principles on KIDs. It also mandated the European Supervisory Authorities (ESAs) to develop Regulatory Technical Standards on the content and presentation of the KIDs, as well as on the timing of delivery of the KIDs.

The Regulatory Technical Standards  were prepared by ESAs following two phases of consumer testing on aspects of the presentation, as well as an extensive period of consultation with market participants, including a dedicated Consultative Expert Group (Discussion paperTechnical Discussion paper, Consultation paper). The Regulatory Technical Standards were adopted by each of the ESAs' Boards of Supervisors in April 2016 and subsequently endorsed by the European Commission in June 2016 in the form of a Delegated Regulation. In September 2016, during the scrutiny period, the European Parliament objected to the proposed rules and requested changes in a number of specific areas. This objection delayed the application of the KID regime by a year to 1 January 2018.

The European Commission adopted a revised Delegated Regulation in March 2017 with amendments to address the concerns expressed by the European Parliament. This enabled the final rules to be published on 12 April 2017 as European Commission's Delegated Regulation (EU) 2017/653.

In July 2017, the European Commission published a communication containing Guidelines on the application of the PRIIPs Regulation. The communication aimed to facilitate the implementation of, and the compliance with the rules by smoothing out potential interpretative divergences throughout the European Union.

Questions and Answers on the application of the KID

In order to clarify the application of the rules and promote common supervisory approaches and practices in the implementation and supervision of the KID, the ESAs are publishing Questions and Answers (Q&A).

Status of the Questions and Answers material published by the ESAs

The documents published by the ESAs are a practical convergence tool under Article 29(2) of the ESAs' Regulations. They have no binding force in law, nor are they subject to "comply or explain".

The process of developing materials entails close and ongoing interaction between the ESAs and the European Commission to ensure consistency with the European legislative texts.

Due to their nature, formal consultation on the Q&As is considered unnecessary. The material is intended to be continually edited and updated as and when new questions are received.

Additional questions

Stakeholders are invited to submit any new questions to the following address PRIIPs@eiopa.europa.eu.

Since updates to the published Q&A will be made on a periodic basis, please note that it may take some time for a response to be provided. Depending on the number of questions received and the nature of the question (for example whether it is a factual question or raises policy issues or new points of interpretation) it may also not be possible to respond to all of the questions received within the subsequent Q&A publication or update. It may also be decided that it is not possible for the ESAs to provide a response to the specific question, for example if it is not within the ESAs’ remit.    

PRIIPs with environmental or social objectives

In May 2016, the European Commission invited the ESAs to provide technical advice on possible delegated acts on the governance procedures that PRIIPs manufacturers must follow when they offer PRIIPs which have environmental or social objectives.

Following a public consultation in February 2017 the ESAs published its technical advice in July 2017.