As of 1 January 2023, capital management companies (Kapitalverwaltungsgesellschaften) have to prepare a PRIIPs key information document for an investment fund that is distributed to private and semi-professional investors. The following is a summary of five frequently asked questions and answers on this topic:
What is the purpose of the key information document?
- The key information document shall enable retail investors in the EU to better understand the basic features and risks of PRIIPs (Packaged Retail and Insurance-Based Investment Products).
- In addition, the requirements for PRIIPs key information documents should lead to a better comparability of such products across Europe.
For which funds does a PRIIPs-KID have to be prepared?
- All open-ended and closed-ended public investment funds with an existing sales notification (Vertriebsanzeige).
- In principle, for all open-ended and closed-ended special investment funds that issue units to semi-professional investors. This does not apply to special funds that will no longer be actively distributed after 1 January 2023, i.e. no new units will be issued to investors and this does not have to be expected.
When does the PRIIPs-KID have to be made available?
- Until 31 December 2022, capital management companies (Kapitalverwaltungsgesellschaften) are excluded from the obligation to prepare a PRIIPs-key information document if they prepare key investor information according to the KAGB (Kapitalanlagegesetzbuch).
- As of 1 January 2023, capital management companies (Kapitalverwaltungsgesellschaften) must prepare the PRIIPs key investor information sheet for an investment fund that is distributed to private and semi-professional investors. At this time, the obligation to prepare key investor information will no longer apply. Reason: The key information document, which meets the requirements of the PRIIPs Regulation, is considered equivalent to the key investor information.
In which form does the PRIIPs-KID have to be provided?
- The PRIIPs-KID must be made available free of charge.
- In general, it has to be made available on paper. Under certain conditions, it may be made available via other media (permanent data carrier or website).
What is the scope and format of the PRIIPs-KID?
- The PRIIPs Regulation and the Delegated Regulation specify numerous (in some cases complex) details regarding the form and content of the key information document.
- To illustrate this, the following points should be mentioned here as examples:
- The information contained must be precise, fair and clear and must not be misleading.
- The order and headings of the sections for the key information document are compulsorily stipulated.
- Certain passages or headings must be highlighted.
- The key information document shall be drawn up with a maximum of three sides of A4-sized paper when printed.