Packaged retail investment and insurance products (PRIIPs) cover the range of investment products marketed to retail investors.
PRIIPs include the following:
Structured financial products, such as options, which are packaged in insurance policies, securities or banking products;
Financial products whose value is derived from reference values such as shares or exchange rates (derivatives);
Closed-ended and open-ended investment funds;
Investment-type insurance products, such as with-profit and unit-linked life insurance and hybrid products; and
Instruments issued by special purpose vehicles.
Given the variety and complexity of the products and the size of the market, consumers need comprehensive and consistent information about them. Accordingly, and in an effort to improve transparency in the investment market, those producing or selling investment products to consumers are required to set out the pre-contractual information in, what is known as the Key Information Document (KID). Broadly, KIDs are consumer-friendly information about the key features of investment products, including what investors might gain and the risks and costs involved. KIDs also allow investors to compare PRIIPs across the EU, whether offered by banking, insurance or securities firms.
Commission Delegated Regulation (EU) 2021/2268 amends and replaces Delegated Regulation 2017/653.
As at 1 January 2023 a PRIIP KID will need to be produced for all UCITS funds (and other investment funds distributed to retail investors).
