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Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 (“PRIIPs Regulation”) concerns key information documents for packaged retail and insurance-based investment products.
The purpose of the PRIIPs Regulation is to improve information disclosures and protection of retail investors with the provision of a key information document (KID) prior to the subscription of a packaged retail and insurance-based investment product (“PRIIP”).
A PRIIP is an investment where, regardless of the legal form of the investment, the amount repayable to the retail investor is subject to fluctuations because of exposure to reference values or to the performance of one or more assets which are not directly purchased by the retail investor.
Before a PRIIP is made available to retail investors, the PRIIP manufacturer must draw up for that product a KID and publish the document on its website. Moreover, a person advising on, or selling, a PRIIP must provide retail investors with the KID in good time before those retail investors are bound by any contract or offer relating to that PRIIP.
The KID introduces common standards for the presentation of information for retail investors regarding packaged retail and insurance-based investment products which must allow these investors to understand and compare the main risks, features, costs and possible future performance of the products concerned.
The PRIIPs Regulation applies from 1 January 2018.
Luxembourg manufacturers of undertakings for collective investment (UCIs) the units of which are offered or sold to retail investors and persons advising on or selling units of such UCIs (non-UCITS) must comply with the requirements of the PRIIPs Regulation, unless they have chosen to draw up a UCITS-like key investor information document (KIID) in conformity with Article 2 of the law of 17 April 2018 on key information documents for packaged retail and insurance-based investment products (“PRIIPs Law”).