Preparation of the KID under the PRIIPs Regulation

What is a Key Information Document (PRIIPs)?

The obligation to provide key information to retail clients (investors) was introduced into Czech law by 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 Regulation).

The PRIIPs Regulation is complemented, among others, by Commission Delegated Regulation (EU) 2017/653 of 8 March 2017, which supplements Regulation (EU) No. 1286/2014 by laying down regulatory technical standards (RTS) for the presentation, content, review, and revision of key information documents, as well as the conditions for fulfilling the requirement to provide such documents.

What does the KID contain?

The obligation to provide key information for retail investment products requires the manufacturer or distributor of the investment product to provide end-investors with a concise, yet comprehensive, document not exceeding three A4 pages, summarizing key information about the product — known as the KID.

The purpose of this regulation is, of course, to strengthen the protection of retail investors and to improve their decision-making and investment selection process. The Key Information Document (KID), among other things, includes the target investor for whom the product is intended, the risk and return profile, the costs associated with the investment product, and information on where complaints can be submitted.

The KID is specifically designed to help investors understand how the product works and compare it with other similar investment products, all in a standardized format and free of charge.

The legislation governs the form, structure, language, and method of publication of the KID. It also mandates the obligation to keep it up-to-date and to provide pre-contractual product information to investors. The KID includes both descriptive (textual) parts and quantitative data about product performance and associated risks.

Is preparing a KID mandatory for alternative funds?

Yes, this obligation is laid down in the PRIIPs Regulation and failure to comply with it may be sanctioned.

We’re happy to help you with the preparation of the KID. We can prepare the KID for your alternative fund, including all required declarations, in the correct format and with all mandatory sections. This will help minimize the risk of sanctions for non-compliance with EU regulations.

Where to next?

• What is an alternative investment fund?
• Obligations of the fund manager
• Turnkey establishment of an alternative fund
• CNB reporting
• AML obligations
• Investment agreement
• Investment strategy
• News