The KIID was introduced as a replacement for the simplified prospectus which was often simply just a “copy/paste” of the full prospectus, with poor design, full of technical terms and lengthy. Due to lack of direction and guidance, the simplified prospectus became an administrative burden with material variations across member states with no real investor benefit.
In July 2010, CESR issued four consultation papers on the KIID including:
These documents, together with the Commission Regulation have formed the cornerstones of the creation, production and dissemination of the KIID.
• Avoid the use of:
- jargon, complex concepts and specialist language
• KII will require:
- just the essential pre-defined information
• KII replaces the simplified prospectus as consumer communication
• It is short, well structured and clearly laid out
• The KII should be effective and accessible to all investors
• It must be engaging and attract the reader’s attention
• The KII should not appear to be a legal document
• “A good design makes a document easier to read and understand.”
- choose an easy to read type font