This section applies to an ICVC, an authorised fund manager of an AUT, ACS or ICVC and any other director of an ICVC where, in each case, the AUT, ACS or ICVC is:
a UCITS scheme; or
a non-UCITS retail scheme that is offered to retail clients if the authorised fund manager or ICVC draws up a NURS-KII document instead of a key information document for the scheme.
An authorised fund manager of a non-UCITS retail scheme or an ICVC that is a non-UCITS retail scheme that is offered to retail clients may draw up either:
a key information document in accordance with the PRIIPs Regulation; or
until 31 December 2026, a NURS-KII document (in accordance with the exemption in article 32(2) of the PRIIPs Regulation).
An authorised fund manager of a KII-compliant NURS or an ICVC that is a KII-compliant NURS will need to comply with COLL Appendix 2R (Modifications to the KII Regulation for KII-compliant NURS), which contains a modified version of the KII Regulation for KII-compliant NURS (see COLL 4.7.3AR).
An authorised fund manager of a KII-compliant NURS or an ICVC that is a non-UCITS retail scheme that is offered to professional clients only is not required to comply with the PRIIPs Regulation or draw up a NURS-KII document.
However, these documents may be used to market the non-UCITS retail scheme to professional clients.
[Note: Article 32(1) of the PRIIPs Regulation as amended by article 17(1) of Regulation (EU) 2019/1156 of the European Parliament and of the Council of 20 June 2019]
An authorised fund manager must draw up a short document in English containing key investor information for investors:
in each UCITS scheme which it manages (a key investor information document); and
in each KII-compliant NURS which it manages (a NURS-KII document).
The words "key investor information" must be clearly stated in the key investor information document and NURS-KII document.
Key investor information must include appropriate information about the essential characteristics of the UCITS scheme or KII-compliant NURS which is to be provided to investors so that they are reasonably able to understand the nature and risks of the investment product that is being offered to them and, therefore, to take investment decisions on an informed basis.
Key investor information must provide information on the following essential elements in respect of the UCITS scheme or KII-compliant NURS:
identification of the scheme and that the FCA is the competent authority of the scheme;
a short description of its investment objectives and investment policy;
past performance presentation or, where relevant, performance scenarios;
costs and associated charges; and
risk/reward profile of the investment, including appropriate guidance and warnings in relation to the risks associated with investments in the scheme.
The essential elements referred to in (4) must be comprehensible to the investor without any reference to other documents.
A key investor information document or NURS-KII document must clearly specify where and how to obtain additional information relating to the proposed investment, including but not limited to where and how the prospectus and the annual and half-yearly reports can be obtained on request and free of charge at any time, and the language in which that information is available to investors.
A key investor information document must also include:
a statement that the details of the up-to-date remuneration policy are available by means of a website, including, but not limited to, the following:
a description of how remuneration and benefits are calculated; and
the identities of persons responsible for awarding the remuneration and benefits, including the composition of the remuneration committee, where such a committee exists; and
a reference to that website, and that a paper copy of the website information will be made available free of charge upon request.
A NURS-KII document must also include a statement that the details of the up-to-date remuneration policy will be made available free of charge upon request, including the following:
a description of how remuneration and benefits are calculated; and
the identities of persons responsible for awarding the remuneration and benefits, including the composition of the remuneration committee, where such a committee exists.
Key investor information must be written in a concise manner and in non-technical language. It must be drawn up in a common format, allowing for comparison, and must be presented in a way that is likely to be understood by retail investors.
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[Note: article 78 of the UCITS Directive]
The KII Regulation sets out the form and content of a key investor information document. Under the Regulation an authorised fund manager must ensure that each key investor information document it produces for a UCITS scheme complies with the requirements of the Regulation. For ease of reference the Regulation is reproduced in COLL Appendix 1UK (The KII Regulation).
The following must comply with COLL Appendix 2R (Modifications to the KII Regulation for KII-compliant NURS), which contains a modified version of the KII Regulation for KII-compliant NURS, when producing a NURS-KII document:
an authorised fund manager of a KII-compliant NURS; and
an ICVC that is a KII-compliant NURS.
The authorised fund manager of a feeder NURS, or an ICVC that is a feeder NURS, that draws up a key information document for a retail client, should cross refer to documents related to its qualifying master scheme which enable such clients to understand the qualifying master scheme’s key particulars including:
its investment strategy;
a description and explanation of any material differences between the risk profile of the feeder NURS and that of the qualifying master scheme; and
its charges, including the aggregate of the charges of the feeder NURS and its qualifying master scheme as disclosed in the feeder NURS’ most up to date prospectus.
[Note: article 6(2) of the PRIIPs Regulation]
While the original key investor information document or NURS-KII document is required by COLL 4.7.2 R to be drawn up in English, an authorised fund manager may prepare an accurate translation of it into any language for the purpose of marketing the units of the UCITS scheme or KII-compliant NURS in the United Kingdom. Any such translation should be prepared without alterations or supplements.
The key investor information document and the NURS-KII document must:
constitute pre-contractual information (see COBS 14.2.1A R (Provision of key investor information document or NURS-KII document));
be fair, clear and not misleading; and
be consistent with the relevant parts of the prospectus.
[Note: article 79(1) of the UCITS Directive]
Section 90ZA of the Act (Liability for key investor information) provides that a person will not incur civil liability solely on the basis of the key investor information document, including any translation of it, unless it is misleading, inaccurate or inconsistent with the relevant parts of the prospectus.
Article 20 of the KII Regulation prescribes the wording of a warning to investors that must be included in the "practical information" section of the key investor information document. It states that an authorised fund manager may be held liable solely on the basis of any statement contained in the document that is misleading, inaccurate or inconsistent with the relevant parts of the prospectus for the UCITS scheme.
A NURS-KII document should not include the wording of warning to investors in (2) as the limitation of liability in (1) does not apply to KII-compliant NURS.
An authorised fund manager must keep up to date the essential elements of:
the key investor information document for each UCITS scheme which it manages; or
the NURS-KII document for each KII-compliant NURS which it manages.
An authorised fund manager must file the key investor information document for each UCITS scheme or the NURS-KII document for each KII-compliant NURS which it manages, and any amendments thereto, with the FCA.
An authorised fund manager of a feeder UCITS or feeder NURS must, in addition to (1) and (2), file the key investor information of its master UCITS or the NURS-KII document of its qualifying master scheme, and any amendments thereto, with the FCA.
[Note: articles 63(3) and 82 of the UCITS Directive]
Authorised fund managers are advised that CESR issued two separate guidelines regarding the methodology that should be used in calculating the synthetic risk and reward indicator and the ongoing charges figure, both of which must be disclosed in the key investor information document for each UCITS scheme which they manage.
In line with the KII Regulation and COLL Appendix 2R, firms in producing their key investor information documents or NURS-KII documents should take account of CESR's methodologies in calculating the figures for the synthetic risk and reward indicators and for ongoing charges to be disclosed in those documents. For ease of reference links to these guidelines are shown below, as follows:
Methodology for the calculation of the synthetic risk and reward indicator in the KII (CESR/10-673)
https://www.esma.europa.eu/sites/default/files/library/2015/11/10_673.pdf
Methodology for the calculation of the ongoing charges figure in the KII (CESR/10-674)
https://www.esma.europa.eu/sites/default/files/library/2015/11/10_674.pdf
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Authorised fund managers of a UCITS scheme and KII-compliant NURS are further advised that ESMA has issued the following guidelines, which refer to matters that should be included in the key investor information for certain types of UCITS (ESMA 2012/832).
Guidelines for competent authorities and UCITS management companies: Guidelines on ETFs and other UCITS issues
COBS 4.13.2R(1)(b) and (c) (Marketing communications relating to UCITS schemes or EEA UCITS schemes) require an authorised fund manager to ensure that its marketing communications that contain an invitation to purchase units in a UCITS scheme or EEA UCITS scheme, indicate that a prospectus and key investor information exist, specifying where they may be obtained by the public or how the public may have access to them.
