Problems with PRIIPs KIDs
On Thursday 17 June 2021, the Belgian regulator (FSMA) issued a feedback statement (here) to PRIIPs manufacturers and distributors in Belgium warning them of issues they observed over a three-year review of KID documents used in the Belgian market. The statement concluded that “the KID is intended to be a useful document for investors” and that the “main objective of the PRIIP Regulation is to enable retail investors to compare products and to make an informed investment decision” however the FSMA found that the “way in which some manufacturers apply this legislation means that the KID does not always achieve a sufficiently high quality to achieve those objectives.” The statement of findings also called out differences between different market participants’ commitment in terms of energy and resource into drawing up the KIDs as they would into their marketing documents.
In fact, the FSMA study concluded that “the majority of the KIDs examined did not enable investors to be adequately informed of a product, its features or risks.” The FSMA has contacted each of the manufacturers where deficiencies were noted and have asked them to make the necessary changes to the KID documents. The FSMA further indicated it will continue to review the KIDS notified to it, and that it expects sustained effort on the part of the sector to improve the clarity and comprehensibility of these documents. Stayed tuned as the PRIIPs saga continues…