On December 21st, 2022, the European Supervisory Authorities (ESA) published another update of the Questions and Answers (Q&As) on the PRIIPs Key Information Document.
This version follows up with the revisions and deletions of the existing (old) RTS – (EU) 2017/653 announced in the previous Q&A update version from November 14th, 2022, in relation to requirements for the KID as follows:
Performance scenarios
- Revised clarification in relation the display of performance scenarios for intermediate holding periods during the lifetime of a product
- Revised clarification in relation to the option to delete specific wording for insurance investment products
- Revised clarification in relation to the number of trading periods to use
- Revised clarification of the application of the term “rolling” in relation to volatility measurement
- Revised clarification in relation to the inclusion of performance scenarios in the case of Category 1 PRIIPs and the rules to calculate the stress scenario
PRIIPs with a RHP of less than one year
- Revised clarification in relation to the presentation and cost figures of PRIIPs with a RHP of less than one year
Derivatives
- Revised section in relation to specific adjustments to the wording of presentation of the SRI, of performance scenarios, of presentation and composition of costs
Multi-option products
- Deletion of a few old Q&A
- Revised section in relation to the form and name of “specific information on each underlying investment option”
Methodology for the calculation of costs
- Revised section in relation to the reference to benchmarks for new funds with performance fees
Transaction costs
- Deletion of a few old Q&A
- Revised clarification in relation to the application of “comparable information”
- Revised clarification in relation to the calculation of transaction costs for PRIIPs that have been operating less than 3 years
- Revised clarification in relation to the way transaction costs should be calculated in “Composition of costs” and “Cost over time” tables
Costs of PRIPs other than investment funds
- Revised clarification in relation to the costs reported by the exchange
Costs of insurance-based investment products
- Revised clarification in relation to the inclusion of transaction costs in the “Composition of costs” table
Calculation of SRIs
- Revised section in relation to the methodology and assumptions used for the calculation of Reduction in Yield indicator
- Revised section in relation to assumptions to be made for products with tiered charging
- Revised section in relation to the usage of a predetermined yield for unit-linked products with UCITS underlyings
- Revised section in relation to the presentation of costs for moderate scenarios showing a total loss of capital or a negative return
Presentation of costs
- Revised clarification in relation to the calculation of entry and exit costs under the “Composition of costs” table
- Revised clarification in relation to the annual cost impact shown in the “Composition of costs” table
- Revised section in relation to the presentation of information on costs for insurance products
- Revised clarification in relation to duplicated statements on costs and performance scenarios sections of the KID
- Revised clarification in relation to the display of “Total costs” in the “Cost over time” table
cleversoft Regulatory Watch team is analyzing all new details to determine any adjustments deriving from this Q&A update recommended for our PRIIP services. If you are interested in learning more about the cleversoft PRIIP services or in case you have any questions about them, please do not hesitate to contact us.
