PRIIPs overview

The PRIIPs Regulation requires UCITS funds to use arrival prices to calculate implicit transaction costs instead of New PRIIPs (NP) by the end of 2024. While most global asset managers have already adopted the Arrival Price (AP) standard, many market participants have not yet transitioned from NP to AP, which has significant data management and technology infrastructure implications.

PRIIPs regulation prescribes displaying forward-looking performance scenarios, showing the various possible outcomes. For the majority of the investment funds, the PRIIPs KID discloses the performance scenarios in the favourable, moderate, unfavourable and stressed conditions.

Find all the information you need on PRIIPs regulation including Key Information Documents (KIDs).

The components of transaction costs for MiFID II and PRIIPs are similar, with the exception that market movements should not be taken into account for MiFID II even though MiFID II Investor protection Q&As mention the potential use of PRIIPs arrival price.

After the end of the UCITS exemption, PRIIPs KIDs went live for European investment funds distributed to retail investors on January 1st 2023.

European Commission Delegated Regulation concerning PRIIPs is live since January 1st, 2018. It encompasses all products, regardless of their structure, where the amount payable to a retail investor can fluctuate due to the performance of assets not directly purchased by said retail investor.

From the start of 2017, all entities in the EU advising on or selling Packaged Retail and Insurance-based Investment Products (PRIIPs) will be required to provide a Key Information Document (KID) to retail investors.

The Packaged Retail and Insurance-based Products (PRIIPs) Regulation aims to provide clarity and protection for retail investors. However, the financial industry has been critical of the prescribed methodologies for various disclosures since its go-live date in January 2018.

The most impactful element of this new Q&A concerns aligning the applicable timeline for updating the annual past performance annex with the UCITS Key Investor Information Document (KIID) rule and confirming the absence of a prescribed timetable for updating PRIIPs KID.

Value-at-Risk (VaR) has become the most popular measure of risk. The simple definition and interpretation of the metric made it a tool of choice for various groups of diverging stakeholders such as risk managers, regulators (c.f. Solvency II, Basel III, UCITS, PRIIPs) and board members.

SRI calculation relies on both a market and a credit risk measure. Compared to SRRI, market risk measure uses an alternative volatility and determines market risk score based on wider buckets.

With the Packaged Retail and Insurance-based Investment Products (PRIIPs) regulatory deadline for arrival price transaction costs fast approaching, the migration from the new PRIIPs (NP) to the arrival price (AP) methodology is raising some concerns over market data availability.