ESAs shared initial views on consumer-friendly Key Information Documents on investment products across the EU

17 November 2014

The discussion paper aims to help retail investors in the EU better understand and compare packaged retail and insurance-based investment products.

The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA) have published a Discussion Paper on Key Information Documents (KIDs). The ESAs are looking for feedback from all concerned stakeholders by 17 February 2015.

Retail investment products can help EU citizens in building-up savings and can contribute to capital markets that support economic growth in the EU. However, essential information about the risks, rewards and costs of investment products can be overly complex, difficult to find, and hard to compare for retail investors across the EU.

The ESAs are mandated by the Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs Regulation) to develop draft Regulatory Technical Standards (RTS) on the content and presentation of the KIDs for PRIIPs. The aim of the KIDs is to provide EU retail investors with consumer-friendly information about investment products with the ultimate aim of improving transparency in the investment market. In order to ensure that all views and options are taken into consideration when developing the RTS, the ESAs are now seeking stakeholders’ views on how these standardised KIDs should be developed.

This Discussion Paper is a first step in the ESAs’ joint work on the broad issues to be considered in developing the RTS. The paper also includes a series of possible consumer-friendly information templates aimed at providing retail investors with clear and comparable information on the key features of investment products, including on what they might gain if they invest, the risks they are taking, and all the costs they will have to incur.

The Discussion Paper has been developed according to the Regulation on Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs Regulation), agreed in April 2014, which introduces a Key Information Document (KID) that will provide retail investors with information on investment opportunities in the EU. The PRIIPs Regulation defines the main rules and principles on KIDs and mandates the Joint Committee of the ESAs to develop draft RTS on the content and presentation of the KIDs, as well as on the timing of delivery of the KIDs.

The Joint Committee is expected to submit the RTS to the Commission at the beginning of 2016 and the new KIDs will start to be used at the end of 2016. A more technical Discussion Paper will be tabled in the spring of next year, followed, after the summer, by a Consultation Paper on the final rules.

Packaged Retail and Insurance-based Investment Products (PRIIPs) cover the range of investment products marketed to retail investors, a market worth up to €10 trillion in the EU according to European Commission estimates.  They include structured products, whatever their underlying legal form and including structured deposits, insurance-based investments (including unit-linked and with-profit products), and all kinds of investment funds. Ordinary holdings of shares or bonds and certain pensions are not covered. PRIIPs offer benefits for consumers – such as risk diversification and mitigation, and the chance to invest in assets that might otherwise be difficult for the ordinary consumer to access. But the products can often also be very complex and difficult to compare.

Full media release

Full discussion paper


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