Joint Committee launches discussion on PRIIPs key information documents

23 June 2015

The Joint Committee of the European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA – has published today a Technical Discussion Paper on risk, performance scenarios and cost disclosures for Key Information Documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs). The Joint Committee is looking for feedback from all concerned stakeholders by 17 August 2015.
The ESAs are mandated by the Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs Regulation) to develop draft Regulatory Technical Standards (RTS) on the content and presentation of the KIDs for PRIIPs. The aim of the KIDs is to provide EU retail investors with consumer-friendly information about investment products with the ultimate aim of improving transparency in the investment market. The ESAs issued a first Discussion Paper in November 2014 (JC/DP/2014/02) seeking stakeholders' general views on how these standardised KIDs should be developed. 
The Technical Discussion Paper published today aims to collect views on the possible methodologies to determine and display risks, performance and costs in the KID. The paper is split into a section on risk and reward and a section on costs. A number of different methodological options are identified for each element of disclosure. 
The discussion paper is available on the websites of the three ESAs: EBA, ESMA and EIOPA. Comments on this discussion paper can be sent via the ‘Consultations' section of the ESMA website.

Next steps

The ESAs expect to follow this Technical Discussion Paper with a final Consultation Paper setting out the draft RTS under Article 8 of the PRIIPs Regulation in the autumn of 2015. A separate Consultation Paper will also be published for the draft RTS under Articles 10 and 13.
The draft RTS on Article 8 will then be finalised and submitted to the European Commission by 31 March 2016, as set out in the PRIIPs Regulation. 

Notes for editors

The PRIIPs Regulation defines the main rules and principles on KIDs and mandates the Joint Committee to develop draft RTS on the content and presentation of the KIDs, as well as on the timing of delivery of the KIDs.
Packaged Retail and Insurance-based Investment Products (PRIIPs) cover the range of investment products marketed to retail investors, a market worth up to €10 trillion in the EU according to European Commission estimates.  They include structured products, whatever their underlying legal form and including structured deposits, insurance-based investments (including unit-linked and with-profit products), and all kinds of investment funds. Ordinary holdings of shares or bonds and certain pensions are not covered. PRIIPs offer benefits for consumers – such as risk diversification and mitigation, and the chance to invest in assets that might otherwise be difficult for the ordinary consumer to access. But the products can often also be very complex and difficult to compare.