PRIIPs

Overview

The regulation on key information documents for packaged retail and insurance-based investment products (the PRIIPs Regulation) is part of a wider package of EU reforms aimed at enhancing investor protection and improving confidence in financial markets.

Manufacturers of packaged retail and insurance-based investment products (PRIIPs) will be required to produce a highly prescriptive three page "key information document" (KID) to allow retail investors to easily understand and compare products and the risks, costs and returns associated with them. The PRIIPs Regulation comes into force on 31 December 2016.

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Territorial scope of the Regulation
  • Manufacturer Distributor  Retail client  In scope? 
    EEA manufacturer EEA distributor EEA retail client
    EEA manufacturer EEA distributor Non-EEA client X
    EEA manufacturer Non-EEA distributor EEA retail client
    EEA manufacturer Non-EEA distributor Non-EEA client X
    Non-EEA manufacturer EEA distributor EEA retail client ✓- see Article 19(c)
    Non-EEA manufacturer EEA distributor Non-EEA client X
    Non-EEA manufacturer Non-EEA distributor EEA retail client
    Non-EEA manufacturer Non-EEA distributor Non-EEA client X

    In its consultation paper issued on 18 July 2016, the FCA stated that its current view is that the PRIIPs Regulation will apply to persons outside the EEA (manufacturer or distributor) who deal with EEA retail clients. Accordingly, a third-country manufacturer or distributor of a PRIIP to retail clients in the EEA (e.g. an AIFM for schemes from the Channel Islands or Isle of Man sold in the UK) will be required to prepare and produce a KID. Conversely, if the manufacturer or distributor is based in the UK EEA and targets only non-EEA retail clients, the FCA’s view is that the PRIIPs Regulation will not apply and no KID will need to be prepared.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.