PRIIPS Regulation

Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs).

DEFINITION

A PRIIP can either be:

(i) an investment product 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; or (ii) an insurance-based product which offers a maturity or surrender value and where that maturity or surrender value is wholly or partially exposed, directly or indirectly, to market fluctuations.

A packaged retail and insurance-based investment product or "PRIIP" means a product that is one or both of the above.

The Regulation aims for the creation of a Key Information Document or KID similar to the KIID (Key Investor Information Document) that exists for units of UCITS.

The Regulation targets the PRIIPs, the "manufacturers" (issuers), and the "persons advising on or selling PRIIPs" (distributors).

A PRIIP manufacturer is an entity that manufactures PRIIPs or makes changes to existing PRIIPs including, but not limited to, altering risk and reward profile or investment costs in PRIIPs.

A person selling PRIIPS means a person offering or concluding a PRIIP contract with a retail investor as such investor is defined in MiFID II.

SCOPE - RE: INSURANCE-BASED PRODUCTS

First of all, this Regulation does not apply to:

non-life insurance products; life insurance contracts under which the benefits are payable only on death or in respect of incapacity due to injury, sickness or infirmity; deposits not covered by MiFID II; securities not covered by the prospectus directive (but excluding private placement exemptions); and pension schemes and products. HOW WE...