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PRIIP-paring for the New KID in Town

Manufacturers and sellers of packaged retail and insurance-based investment products (PRIIP) to retail investors have been subject to the Regulation (EU) No 1286/2014 on Key Information Documents for Packaged Retail and Insurance-based Investment Products (PRIIPs Regulations) since 1 January 2018. The requirement to provide a PRIIPs Key Information Document (PRIIPs KID) currently applies only to alternative investment funds. However, the exemption applicable to UCITS under the UCITS Directive is set to come to an end.

The European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2022 (S.I. 262 of 2022) introduces the requirement for a PRIIPs KID for UCITS replacing the UCITS KIID, with effect from 1 January 2023.

In addition, the PRIIPs KID format and content is due to change. The PRIIPs Regulatory Technical Standards (RTS), first introduced in 2018, are being amended with new requirements coming into effect from the same date.

What is a PRIIP?

A PRIIP is an investment where, regardless of the legal form of the investment, the amount repayable to the retail investor is subject to fluctuations because of exposure to reference values or to the performance of one or more assets which are not directly purchased by the retail investor.

Products such as investment funds (including AIFs and UCITS) and insurance investment products such as unit-linked policies are therefore considered PRIIPs and come within the scope of the PRIIPs Regulation. However, while a UCITS meets the definition of a PRIIP, the existing UCITS Directive already contains a requirement for a Key Investor Information Document (“KIID”), which is largely similar to the PRIIPs KID. For this reason, the PRIIPs Regulation provided for a transitional period during which UCITS were exempt from its terms.

What is required?

The PRIIPs Regulations introduced an obligation on the PRIIP manufacturer to produce a PRIIPs KID when investment products are sold to retail investors in the EEA. The principle behind the PRIIPs KID is that retail investors should have access to certain pre-contractual information that is accurate, fair, clear and not misleading. The PRIIPs KID should aid the retail investor in its consideration of the PRIIP so as to make an informed investment decision. These requirements are the same as those which apply to a UCITS KIID.

New features of the PRIIP KID

The RTS required for the PRIIPs KID came into force on 1 January 2018 but after an extensive public consultation they were subsequently amended and the European Commission Delegated Regulation (EU) 2021/2268 was adopted by the European Commission on 7 September 2021. The amended RTS were due to apply from 1 July 2022 but were pushed back by the European Commission. This brings them in line with the 1 January 2023 deadline for the transition from UCITS KIID to PRIIPs KID.

Key areas of change in the amended RTS to be introduced from the January deadline include the following:

  • Forwards projections – a projection based on historic performance must now be included. These projections should be shown across a range of performance scenarios including favourable, moderate, unfavourable and stress.
  • Changes to the European PRIIPs template (EPT) – The new EPT will include additional information fields and the data provided will need to be strictly aligned with the data for the PRIIPs KID. The updated EPT will need to begin circulation from October/November 2022 to meet the 1 January deadline.
  • Performance data – the product manufacturer will need to provide past performance data and performance scenario results for the PRIIP via its website on a monthly basis.

Impact on the UCITS KIID

As well as the amended RTS, from 1 January 2023, the exemption under the UCITS Directive will no longer apply to a UCITS. However, as a trade-off, a UCITS will only be obliged to produce a PRIIPs KID for their EEA retail investors, rather than both a PRIIPS KID and UCITS KIID. For their non-retail investors, UCITS can choose to issue either.


UCITS management companies must take steps to ensure that they are in a position to provide EEA retail investors with a PRIIPs KID instead of a UCITS KIID from 1 January 2023. In addition, AIFMs must equally take steps to ensure that their PRIIPs KIDs are amended to. comply with the amended RTS by 1 January 2023.

For further information, contact a member of our Investment Funds team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.

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