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CySEC Circular C312

Subject: Circular C312 (“the Circular”) dated 16.05.19 regarding findings of review into Key Information Document (the “KID”) on Packaged Retail and Insurance – based Investment Products (PRIIPs)

To whom it concerns:

  • CIFs;

Regulation (EU) No. 1286/2014 sets out common standards for KIDs’ disclosure so that retail investors are provided with the information necessary for them to make an informed investment decision.

CySEC has reviewed issues relating to the publication of Key Information Document of PRIIPs. The review identified that the KIDs published by CIFs are flawed in their format, language and content.  All weaknesses identified require immediate implementation of corrective measures to ensure full compliance. CySEC issues the following as a summary of its observations:

  • Drawing up and publishing a KID

CySEC observed that all reviewed CIFs drew up and published a KID for each PRIIP they make available to retail investors

  • Form

KIDs were often not drawn up as a short document written in a concise manner and of a maximum of three sides of A4-sized paper. In addition, the review showed that KIDs were not:

  1. presented and laid out in a way that is easy to read, using characters of readable size;
  2. focused on the key information that retail investors need to ensure their adequate protection;
  3. clearly expressed and written in an easily understandable language and a style so that the information presented is clear, brief and comprehensible.
  • Language

CySEC observed that the majority of KIDs were written in the English language only and not in the official languages, or in one of the official languages, used in the part of the Member State where the PRIIP is distributed.

  • Content

CySEC observed deficiencies in the content of KIDs and in particular:

  1. the absence of all four appropriate performance scenarios (including: a stress scenario, an unfavourable scenario, a moderate scenario and a favourable scenario);
  2. in regard to the costs associated with an investment in the PRIIP, comprising both direct and indirect costs to be borne by the retail investor CySEC observed that:
  3. the costs were not presented by means of summary indicators; and
  4. total aggregate costs were not expressed in monetary and percentage terms, to show the compound effects of the total costs on the investment.
  5. CySEC observed that there was no concise reference to the following information:
  6. steps to be followed for lodging a complaint about the product or about the conduct of the PRIIP manufacturer or the person advising on, or selling, the product;
  7. a link to the relevant website for such complaints;
  • an up-to-date postal address and an email address to which such complaints may be submitted.
  1. the absence of any indications of additional information documents that may be provided, and whether such additional information documents are made available based on a legal requirement or only at the request of the retail investor.

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