The European retail investment market offers investors a large range of different types of investment products. The European Commission found that whilst this diversity provides consumers with huge choice, the products themselves could be difficult to understand. The PRIIPS Regulation is being introduced in order to help retail investors compare different products and make a more informed choice about their investments. It introduces a new pre-contractual disclosure document call a Key Information Document, or KID, which will enable investors to shop around more easily.

What is a PRIIP?

PRIIP stands for packaged retail and insurance-based investment product. It is broadly defined and captures both investment and insurance products including, for example:

  • Investment funds
  • Life insurance policies with an investment element
  • Structured products and structured deposits, and
  • Financial instruments issued by SPVs that meet the definition of PRIIPS.

Which firms will be affected?

The PRIIPS Regulation will affect a wide range of firms who operate in the retail investment market, including:

  • Firms that manufacture, advise on, or sell retail investment products that fall within the scope of PRIIPS
  • UCITS management companies
  • Authorised fund managers of non-UCITS retail schemes (NURS)
  • Investment companies with variable capital that are NURS
  • Firms who currently provide investors in NURS or Qualified Investor Schemes with a Key Feature Document or a simplified prospectus, and
  • AIFMs who make their AIF’s available to retail clients.

The question all firms should consider, is whether they manufacture or distribute any product which falls within the definition of a PRIIP.

What will firm’s need to do?

The PRIIPS Regulation is directly applicable along with the associated Regulatory Technical Standards which set out the detail on the format and content of the KID. Firms will need to comply with this along with any other FCA Handbook requirements and EU/domestic legislation. Simply put, for PRIIPS manufacturers, this means they will need to:

  • Prepare a KID for each PRIIP they produce, and
  • Publish each KID on their website.

Firms who advise on, or sell, PRIIPS to retail investors must provide the investor with the KID in good time before the transaction is concluded.


The PRIIPs Regulation will come into force on 1 January 2018.   Both the PRIIPS Regulation and the Regulatory Technical Standard have been published in the Official Journal and the FCA have issued their Policy Statement setting out their disclosure rules. In addition, the European Supervisory Authorities have published useful guidance that includes information about the presentation, content and review of the KID as well as helpful Q&A.  HMT has finalised the necessary UK changes to law.  Firms now have a relatively short time frame to ensure they meet the new requirements.

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