How to overcome the challenges of PRIIPS regulation

From January 2017, providers of investment products will need to give retail investors a Key Information Document (KID) – a “standardised and simple document giving key facts on the product”. The KID will need to explain clearly, in three pages, everything the potential investor needs to know to make a sound investment decision.

The new rules will apply to Packaged Retail and Insurance-Based Investment Products (PRIIPs). The regulations cover not only collective investment schemes but also other ’packaged’ investment products offered by banks and insurance companies (although pensions, non-life insurance products and instruments that are directly purchased by the retail investor such as corporate shares and sovereign bonds are out of scope).

The new PRIIPs regulation represents a major challenge for manufacturers and distributors of financial products right across the banking, insurance and asset management industries. The new documents will be costly and time-consuming to create and any inaccurate, out-dated or misleading information could lead to non-compliance.

This whitepaper will:
• Explain the history and background to the new rules.
• Set out the requirements and show what products and services are affected.
• Show the timeframe for implementation.
• Discuss the challenges that manufacturers and distributors of financial products will need to overcome.
• Make recommendations for action that will help to minimise the manual processes, lengthy data gathering and lack of automation in place at some financial institutions.