2016年-EBA欧洲银行管理局_JC_2015_073_CP_PRIIPs_Key_Information_Documents_146页_2mb

Summary of the Joint Consultation Paper on PRIIPs Key Information Documents (KID)

Core Content

The Joint Consultation Paper (JC 2015 073), dated 11 November 2015, outlines Draft Regulatory Technical Standards (RTS) for the presentation, content, review, and provision of the Key Information Document (KID) for Packaged Retail and Insurance-based Investment Products (PRIIPs) under Regulation (EU) No 1286/2014. The purpose of the consultation is to gather stakeholder feedback on the proposed standards, particularly regarding methodologies for calculating and presenting risks, rewards, and costs, as well as the review and republication of KIDs and the timing of their provision.

The consultation follows two Discussion Papers (JC/DP/2014/02 and JC/DP/2015/01), and includes provisional feedback on these papers and preliminary impact assessments of the proposed RTS.

Main Points and Key Information

1. Purpose and Scope of the Consultation

• The consultation seeks input on the draft RTS under Articles 8(5), 10, and 13 of the PRIIPs Regulation.
• The RTS aim to standardise the presentation and content of KIDs, including risk, reward, and cost information.
• The Consumer Testing study by the European Commission and technical input from a Consultative Expert Group were considered in the development of the draft RTS.

2. Key Elements of the Draft RTS

Article 8(5) – Presentation and Content of the KID

• A mandatory template for the KID is proposed, with permitted adaptations.
• A summary risk indicator (SRI) is required, consisting of seven risk classes.
• Methodologies for assigning PRIIPs to SRI classes and for including narrative explanations and warnings are included.
• Performance scenarios must be presented in tables, showing at least three scenarios (unfavourable, moderate, and favourable) for different time periods.
• Costs are to be presented in a standardised format, including aggregated cost figures, breakdowns, and accumulation in monetary and percentage terms.
• Special provisions are made for products with multiple investment options (MOPs), allowing for either separate KIDs for each option or a generic KID with additional documents for option-specific details.

Article 10 – Review, Revision, and Republication of KIDs

• Annual revisions of KIDs are required.
• Ad hoc revisions must be conducted when necessary due to changes in risk, reward, or cost methodologies.
• Manufacturers are responsible for ensuring the consistency of information across all KID formats.

Article 13 – Timing of KID Provision

• KIDs must be provided sufficiently early to allow retail investors to make informed decisions.
• The timing may vary depending on the product type and investor needs.

3. Stakeholder Questions and Considerations

Question 1 – Comprehension Alert

• Should the ESAs issue guidelines to clarify the criteria for the comprehension alert (Recital 18) to ensure a common approach and comparability across member states?

Question 2 – Standardised Amounts

• Should the default standardised investment amounts (1,000 EUR for investment funds and non-insurance-based PRIIPs, 15,000 EUR for single premium insurance-based PRIIPs, and 1,000 EUR annually for regular premium PRIIPs) be adjusted?
• Should the standardised amount be used unless a specific investment amount is known?

Question 3 – Methodology for VaR Equivalent Volatility

• Should bootstrapping be used instead of the Cornish Fisher expansion for products in category II?

Question 4 – Confidence Interval for VaR

• Should the confidence interval for VaR be changed from 2.5%?

Question 5 – Compensation/Guarantee Schemes

• Should national compensation or guarantee schemes be taken into account when assessing credit risk?

Question 6 – Voluntary Increase of SRI

• Should PRIIP manufacturers have the option to voluntarily increase the disclosed SRI?

Question 7 – Credit Risk Adjustment for Tenor

• Should the credit risk be adjusted based on the tenor of the PRIIP?

Question 8 – Scales of Risk Classes

• Should the scales of MRM, CRM, and SRI be adjusted? If so, what is the alternative scale?

Question 9 – Capital Protection and Tenor

• Should PRIIPs with full capital protection and indefinite redemption be automatically assigned to MRM class 1 regardless of tenor?

Question 10 – Credit Risk Mitigating Circumstances

• Are there other mitigating circumstances for credit risk that should be considered?

Question 11 – Look Through Approach

• Is the look through approach for assessing credit risk in a PRIIP packaged into another PRIIP appropriate?

Question 12 – Currency Risk

• Should currency risk be included in the SRI when the PRIIP and investor use different currencies?

Question 13 – Risk During Product Life

• Is the current methodology for SRI sufficient in addressing the risk of PRIIPs during their life, not just at maturity?

Question 14 – Performance Fees in Scenarios

• Should performance fees be based on the cost section for calculating returns in performance scenarios?
• Should the same benchmark return be used for all scenarios (favourable, moderate, and unfavourable), or should performance fees be zero in unfavourable scenarios?

Question 15 – Graphical Presentation of Performance Scenarios

• Should performance scenarios be presented as graphs, or tables, or both?

Question 16 – Transaction Costs Scope

• Should the scope of assets for transaction costs be adjusted?

Question 17 – Transaction Costs Table Values

• Should the values in the transaction costs table be adjusted?

Question 18 – Annualised Cost Amounts

• Should the monetary values in the cost table reflect annualised costs?

Question 19 – Biometric Risk Premiums Fair Value

• Are there technical or practical difficulties in estimating the fair value of biometric risk premiums?

Question 20 – Presentation of Biometric Risk Premiums

• Should fair value and biometric risk premiums be presented in separate lines in the cost table, or elsewhere in the KID?
• What narrative text should accompany these figures?

Question 21 – Alternative Cost Table Presentation

• Should the second table in the cost section use monetary values instead of percentages?

Question 22 – Graphical Cost Breakdown

• Should the cost breakout table be presented in a more graphical format?

Question 23 – Performance Fee Variability

• Should the variability of performance fees across scenarios be included in the KID?

Question 24 – Combining Cost Tables

• Should the first and second tables in the cost section be combined into one table?
• Should this be supplemented with a graphical breakdown?

Question 25 – Reduction in Yield (RIY) for Structured Products

• Should the RIY calculation for structured products always be based on an adjustment of investor payments?

Next Steps

• The consultation paper is available on the ESAs' websites.
• Responses must be submitted using the response form on the ESMA website by 29 January 2016.
• Contributions not in the template or submitted after the deadline will not be processed.
• All responses will be published unless the stakeholder requests confidentiality.
• The impact assessment and discussion papers are provided for reference and feedback.

Data Protection

• Information on data protection is available on the EIOPA, EBA, and ESMA websites.