Regulation (EU) No 1286/2014 of the European Parliament and of the CouncilShow full title

CHAPTER II U.K. KEY INFORMATION DOCUMENT

SECTION I U.K. Drawing up the key information document

Article 5 U.K.

1. Before a PRIIP is made available to retail investors [F1 in the United Kingdom], the PRIIP manufacturer shall draw up for that product a key information document in accordance with the requirements of this Regulation and shall publish the document on its website.

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Textual Amendments

F1 Words in Art. 5(1) inserted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 6(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F2 Art. 5(2) omitted (31.12.2020) by virtue of The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 6(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

SECTION II U.K. Form and content of the key information document

Article 6 U.K.

1. The key information document shall constitute pre-contractual information. It shall be accurate, fair, clear and not misleading. It shall provide key information and shall be consistent with any binding contractual documents, with the relevant parts of the offer documents and with the terms and conditions of the PRIIP.

2. The key information document shall be a stand-alone document, clearly separate from marketing materials. It shall not contain cross-references to marketing material. It may contain cross-references to other documents including a prospectus where applicable, and only where the cross-reference is related to the information required to be included in the key information document by this Regulation.

3. By way of derogation from paragraph 2, where a PRIIP offers the retail investor a range of options for investments, such that all information required in Article 8(3) with regard to each underlying investment option cannot be provided within a single, concise stand-alone document, the key information document shall provide at least a generic description of the underlying investment options and state where and how more detailed pre-contractual information documentation relating to the investment products backing the underlying investment options can be found.

4. The key information document shall be drawn up as a short document written in a concise manner and of a maximum of three sides of A4-sized paper when printed, which promotes comparability. It shall:

(a) be presented and laid out in a way that is easy to read, using characters of readable size;

(b) focus on the key information that retail investors need;

(c) be clearly expressed and written in language and a style that communicate in a way that facilitates the understanding of the information, in particular, in language that is clear, succinct and comprehensible.

5. Where colours are used in the key information document, they shall not diminish the comprehensibility of the information if the key information document is printed or photocopied in black and white.

6. Where the corporate branding or logo of the PRIIP manufacturer or the group to which it belongs is used in the key information document, it shall not distract the retail investor from the information contained in the document or obscure the text.

Article 7 U.K.

1. The key information document [F3 must be written in English, or where it has been written in a different language, it must be translated into English].

The translation shall faithfully and accurately reflect the content of the original key information document.

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Textual Amendments

F3 Words in Art. 7(1) substituted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(1)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F4 Art. 7(2) omitted (31.12.2020) by virtue of The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(1)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 8 U.K.

1. The title ‘Key Information Document’ shall appear prominently at the top of the first page of the key information document.

The key information document shall be presented in the sequence laid down in paragraphs 2 and 3.

2. An explanatory statement shall appear directly underneath the title of the key information document. It shall read:

‘This document provides you with key information about this investment product. It is not marketing material. The information is required by law to help you understand the nature, risks, costs, potential gains and losses of this product and to help you compare it with other products.’.

3. The key information document shall contain the following information:

(a) at the beginning of the document, the name of the PRIIP, the identity and contact details of the PRIIP manufacturer, F5 ... and the date of the document;

(b) where applicable, a comprehension alert which shall read: ‘You are about to purchase a product that is not simple and may be difficult to understand.’;

(c) under a section titled ‘What is this product?’, the nature and main features of the PRIIP, including:

(i)

the type of the PRIIP;

(ii)

its objectives and the means for achieving them, in particular whether the objectives are achieved by means of direct or indirect exposure to the underlying investment assets, including a description of the underlying instruments or reference values, including a specification of the markets the PRIIP invests in, including, where applicable, specific environmental or social objectives targeted by the product, as well as how the return is determined;

(iii)

a description of the type of retail investor to whom the PRIIP is intended to be marketed, in particular in terms of the ability to bear investment loss and the investment horizon;

(iv)

where the PRIIP offers insurance benefits, details of those insurance benefits, including the circumstances that would trigger them;

(v)

the term of the PRIIP, if known;

(d) under a section titled ‘What are the risks and what could I get in return?’, a brief description of the risk-reward profile comprising the following elements:

(i)

a summary risk indicator, supplemented by a narrative explanation of that indicator, its main limitations and a narrative explanation of the risks which are materially relevant to the PRIIP and which are not adequately captured by the summary risk indicator;

(ii)

the possible maximum loss of invested capital, including, information on:

• whether the retail investor can lose all invested capital, or

• whether the retail investor bears the risk of incurring additional financial commitments or obligations, including contingent liabilities in addition to the capital invested in the PRIIP, and

• where applicable, whether the PRIIP includes capital protection against market risk, and the details of its cover and limitations, in particular with respect to the timing of when it applies;

(iii)

appropriate [F6 information on performance];

(iv)

where applicable, information on conditions for returns to retail investors or built-in performance caps;

(v)

a statement that the tax legislation of the [F7 United Kingdom] may have an impact on the actual payout;

(e) under a section titled ‘What happens if [the name of the PRIIP manufacturer] is unable to pay out?’, a brief description of whether the related loss is covered by an investor compensation or guarantee scheme and if so, which scheme it is, the name of the guarantor and which risks are covered by the scheme and which are not;

(f) under a section titled ‘What are the costs?’, the costs associated with an investment in the PRIIP, comprising both direct and indirect costs to be borne by the retail investor, including one-off and recurring costs, presented by means of summary indicators of these costs and, to ensure comparability, total aggregate costs expressed in monetary and percentage terms, to show the compound effects of the total costs on the investment.

The key information document shall include a clear indication that advisors, distributors or any other person advising on, or selling, the PRIIP will provide information detailing any cost of distribution that is not already included in the costs specified above, so as to enable the retail investor to understand the cumulative effect that these aggregate costs have on the return of the investment;

(g) under a section titled ‘How long should I hold it and can I take money out early?’

(i)

where applicable, whether there is a cooling off period or cancellation period for the PRIIP;

(ii)

an indication of the recommended and, where applicable, required minimum holding period;

(iii)

the ability to make, and the conditions for, any disinvestments before maturity, including all applicable fees and penalties, having regard to the risk and reward profile of the PRIIP and the market evolution it targets;

(iv)

information about the potential consequences of cashing in before the end of the term or recommended holding period, such as the loss of capital protection or additional contingent fees;

(h) under a section titled ‘How can I complain?’, information about how and to whom a retail investor can make a complaint about the product or the conduct of the PRIIP manufacturer or a person advising on, or selling, the product;

(i) under a section titled ‘Other relevant information’, a brief indication of any additional information documents to be provided to the retail investor at the pre-contractual and/or the post-contractual stage, excluding any marketing material.

4. The [F8 Treasury may by Regulations specify] the details of the procedures used to establish whether a PRIIP targets specific environmental or social objectives.

5. In order to ensure consistent application of this Article, the [F9 FCA may make technical standards in accordance with Chapter 2A of Part 9A of FSMA (“technical standards”)] specifying:

(a) the details of the presentation and the content of each of the elements of information referred to in paragraph 3;

(b) the methodology underpinning the presentation of risk and reward as referred to in points (d) (i) and (iii) of paragraph 3; and

(c) the methodology for the calculation of costs, including the specification of summary indicators, as referred to in point (f) of paragraph 3.

When [F10 making technical standards, the FCA must] take into account the various types of PRIIPs, the differences between them and the capabilities of retail investors as well as the features of the PRIIPs so as to allow the retail investor to select between different underlying investments or other options provided for by the product, including where this selection can be undertaken at different points in time, or changed in the future.

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Textual Amendments

F5 Words in Art. 8(3)(a) omitted (31.12.2020) by virtue of The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(2)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F6 Words in Art. 8(3)(d)(iii) substituted (1.7.2021) by Financial Services Act 2021 (c. 22), ss. 38(4), 49(5); S.I. 2021/739, reg. 3(t)

F7 Words in Art. 8(3)(d)(v) substituted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(2)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F8 Words in Art. 8(4) substituted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(2)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F9 Words in Art. 8(5) substituted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(2)(d)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F10 Words in Art. 8(5) substituted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(2)(d)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F11 Words in Art. 8(5) omitted (31.12.2020) by virtue of The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(2)(d)(iii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 9 U.K.

Marketing communications that contain specific information relating to the PRIIP shall not include any statement that contradicts the information contained in the key information document or diminishes the significance of the key information document. Marketing communications shall indicate that a key information document is available and supply information on how and from where to obtain it, including the PRIIP manufacturer's website.

Article 10 U.K.

1. The PRIIP manufacturer shall review the information contained in the key information document regularly and shall revise the document where the review indicates that changes need to be made. The revised version shall be made available promptly.

2. In order to ensure consistent application of this Article, the [F12 FCA may make technical standards in accordance with Chapter 2A of Part 9A of FSMA] specifying:

(a) the conditions for reviewing the information contained in the key information document;

(b) the conditions under which the key information document must be revised;

(c) the specific conditions under which information contained in the key information document must be reviewed or the key information document revised where a PRIIP is made available to retail investors in a non-continuous manner;

(d) the circumstances in which retail investors are to be informed about a revised key information document for a PRIIP purchased by them, as well as the means by which the retail investors are to be informed.

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Textual Amendments

F12 Words in Art. 10(2) substituted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(3)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F13 Words in Art. 10(2) omitted (31.12.2020) by virtue of The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(3)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 11 U.K.

1. The PRIIP manufacturer shall not incur civil liability solely on the basis of the key information document, including any translation thereof, unless it is misleading, inaccurate or inconsistent with the relevant parts of legally binding pre-contractual and contractual documents or with the requirements laid down in Article 8.

2. A retail investor who demonstrates loss resulting from reliance on a key information document under the circumstances referred to in paragraph 1, when making an investment into the PRIIP for which that key information document was produced, may claim damages from the PRIIP manufacturer for that loss in accordance with [F14 the law of the United Kingdom or any part of the United Kingdom].

3. Elements such as ‘loss’ or ‘damages’ as referred to in paragraph 2 of this Article which are not defined shall be interpreted and applied in accordance with the applicable national law as determined by the relevant rules of private international law.

4. This Article does not exclude further civil liability claims in accordance with [F15 the law of the United Kingdom or any part of the United Kingdom].

5. The obligations under this Article shall not be limited or waived by contractual clauses.

Textual Amendments

F14 Words in Art. 11(2) substituted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(4) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F15 Words in Art. 11(4) substituted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 7(4) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 12 U.K.

Where the key information document concerns an insurance contract, the insurance undertakings' obligations under this Regulation are only towards the policyholder of the insurance contract and not towards the beneficiary of the insurance contract.

SECTION III U.K. Provision of the key information document

Article 13 U.K.

1. A person advising on, or selling, a PRIIP shall provide retail investors with the key information document in good time before those retail investors are bound by any contract or offer relating to that PRIIP.

2. A person advising on, or selling, a PRIIP may satisfy the requirements of paragraph 1 by providing the key information document to a person with written authority to make investment decisions on behalf of the retail investor in respect of transactions concluded under that written authority.

3. By way of derogation from paragraph 1 and subject to [F16 the provisions of FSMA and any rules or regulations made under FSMA which were relied on immediately before IP completion day to implement] Article 3(1), point (a) of Article 3(3) and Article 6 of Directive 2002/65/EC, a person selling a PRIIP may provide the retail investor with the key information document after conclusion of the transaction, without undue delay, where all of the following conditions are met:

(a) the retail investor chooses, on his own initiative, to contact the person selling a PRIIP and conclude the transaction using a means of distance communication;

(b) provision of the key information document in accordance with paragraph 1 of this Article is not possible;

(c) the person advising on or selling the PRIIP has informed the retail investor that provision of the key information document is not possible and has clearly stated that the retail investor may delay the transaction in order to receive and read the key information document before concluding the transaction;

(d) the retail investor consents to receiving the key information document without undue delay after conclusion of the transaction, rather than delaying the transaction in order to receive the document in advance.

4. Where successive transactions regarding the same PRIIP are carried out on behalf of a retail investor in accordance with instructions given by that retail investor to the person selling the PRIIP prior to the first transaction, the obligation to provide a key information document under paragraph 1 shall apply only to the first transaction, and to the first transaction after the key information document has been revised in accordance with Article 10.

5. In order to ensure consistent application of this Article, the [F17 FCA may make technical standards in accordance with Chapter 2A of Part 9A of FSMA] specifying the conditions for fulfilling the requirement to provide the key information document as laid down in paragraph 1.

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Textual Amendments

F16 Words in Art. 13(3) inserted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 8(a) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 26(d)) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F17 Words in Art. 13(5) substituted (31.12.2020) by The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 8(b)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F18 Words in Art. 13(5) omitted (31.12.2020) by virtue of The Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/403), regs. 1(2), 8(b)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 14 U.K.

1. The person advising on, or selling, a PRIIP shall provide the key information document to retail investors free of charge.

2. The person advising on, or selling, a PRIIP shall provide the key information document to the retail investor in one of the following media:

(a) on paper, which should be the default option where the PRIIP is offered on a face-to-face basis, unless the retail investor requests otherwise;

(b) using a durable medium other than paper, where the conditions laid down in paragraph 4 are met; or

(c) by means of a website where the conditions laid down in paragraph 5 are met.

3. Where the key information document is provided using a durable medium other than paper or by means of a website, a paper copy shall be provided to retail investors upon request and free of charge. Retail investors shall be informed about their right to request a paper copy free of charge.

4. The key information document may be provided using a durable medium other than paper if the following conditions are met:

(a) the use of the durable medium is appropriate in the context of the business conducted between the person advising on, or selling, a PRIIP and the retail investor; and

(b) the retail investor has been given the choice between information on paper and in the durable medium, and has chosen that other medium in a way that can be evidenced.

5. The key information document may be provided by the means of a website that does not meet the definition of a durable medium if all of the following conditions are met:

(a) the provision of the key information document by means of a website is appropriate in the context of the business conducted between the person advising on, or selling, a PRIIP and the retail investor;

(b) the retail investor has been given the choice between information provided on paper and by means of a website and has chosen the latter in a way that can be evidenced;

(c) the retail investor has been notified electronically, or in written form, of the address of the website, and the place on the website where the key information document can be accessed;

(d) the key information document remains accessible on the website, capable of being downloaded and stored in a durable medium, for such period of time as the retail investor may need to consult it.

Where the key information document has been revised in accordance with Article 10, previous versions shall also be provided on request of the retail investor.

6. For the purposes of paragraphs 4 and 5, the provision of information using a durable medium other than paper or by means of a website shall be regarded as appropriate in the context of the business conducted between the person advising on or selling a PRIIP and the retail investor if there is evidence that the retail investor has regular access to the internet. The provision by the retail investor of an email address for the purposes of that business shall be regarded as such evidence.