Key Information Document for PRIIPs: What Your Business Needs to Know

1. Key Information Document for PRIIPsWhat Your Business Needs to Know

2. Introduction • Packed retail investment and insurance products or PRIIPS are at the core of the retail market. • These investment products are typically offered to the customers, for instance, when making an investment in property or generally investors in any business. • However, the information provided to the investors can often be misleading, complicated, and often lacks transparency. • Moreover, the information provided by the business at the time investors purchase their products can be overly complex and hard to understand. • The complexity and use of too much jargon can be an issue for investors and the information can become difficult to be used for comparison of products.

3. KID for PRIIPS- What Does This Mean? • With the above-mentioned shortcomings in the process, there is a regulation on the PRIIPS. • This regulation states that the businesses who produce or sell investment products need to present investors with KID also known as Key Information Document. • The Key Information Document is intended to improve the transparency of information provided to investors, particularly around the product or service, price, and other important specifications. • The KID will enable the investor to make informed decisions, make comparisons with other businesses and help solve conflicts of interest that may arise.

4. A Key Information Document Must Provide • It should be a maximum of 3 pages and provide clear information on investment products. • Several facts that should be highlighted in the KID include the identity of the business and investor, as well as the contract type between them. • But given that KID is intended to give them clarity on the given product line within the supply chain and other most important aspects. • The other important information it must contain, is as follows, the risk and reward of the product, the maximum cost the investor has to bear while investing, and the information to reach customer support in case there is a problem with the product.

5. When Should a KID be Produced? • Prior to agreeing on the contractual terms, businesses are required to provide each worker with a KID. • This will ensure that the investor has all the necessary details required to make the decision. • It is intended to provide each investor with a clear overview of some important aspects of their proposed engagement. • If the investors decide to invest to finalize on the consecutive agreement with the same business, the agency is only required to provide a new KID in case the terms differ from the previous one.

6. Outsource to Mitigate Risk • Producing a KID document is a complex job, especially when it comes to large financial institutions with an expansive range of product and service categories. • Not only does this will mean developing and managing multiple documents, a large amount of technical and industry-specific content but it also necessitates the translation of the same for the countries you are catering to. • Furthermore, it is also important for businesses to ensure that the sourced content and the translated content is adhered to the PRIIPS KID requirements. • For all these complexities, most organizations outsource their KID management to professionals to alleviate any risk and ensure that their company complies with government regulations.