The Packaged Retail & Insurance-based Investment Products (PRIIPS) regulation comes into force on 1 January 2018, bringing with it a seismic change to disclosure requirements for investment products. Now is the time to act to ensure you’re prepared for this looming deadline.

Why are the regulations coming into force?

PRIPPs make up the majority of the retail investment market and are typically offered by banks to consumers as an investment option for long term saving.

PRIPPs are often complicated and the information typically provided to consumers is regarded as too complex and containing too much jargon. The new rules set to increase transparency for the consumer.

What are the requirements?

Banks and other financial institutions who provide these products now must produce key information documents (KIDs) to keep the consumer informed of the product. The KID should contain a range of stipulated information including details of the risk and reward profile of the product, costs to bear in mind when investing and how to make a complaint, to name but a few.
 

Issues to bear in mind in your planning

When considering preparing your firm for these regulations there a few issues to bear in mind:

• There is limited guidance supporting the production of KIDs and the underlying legislation is difficult to interpret
• Complex modelling is required to produce the required risk indicator / scenario planning for each KID
• A process needs to be in place for regular reviews to demine if updated KIDs are required
   

How we can help get you ready?

Understandably, given the complexities involved, many produces are looking to outsource all or part of the KID production, to ensure they de-risk the process and meet the tight deadline. The team at Johnston Carmichael have significant experience of the existing KIID regime for UCITs funds and the financial models used to produce these documents.

We provide a range of services to ensure you are able to produce the required documentation systematically and efficiently. We can offer a full service, overseeing the whole project or we can assist in area you feel you need particular guidance on, our approach is tailored to you. View our handy document here to get an overview of the PRIPPs support we can provide.

If you’d like to find out more, get in touch with me, Richard Brown, for an initial informal chat.