1In this Regulation, unless the contrary intention appears:

1. (a)

   words and expressions used have the same meaning as in Regulation 1286/2014/EU, as amended by the [Packaged Retail and Insurance-based Investment Products (Amendment) (EU Exit) Regulations 2019];

2. (b)

   a reference to a provision of FSMA is a reference to that provision as amended from time to time;

3. (c)

   a reference to a provision of rules made under FSMA is a reference to that provision as it has effect on IP completion day;

4. (d)

   any reference to a sourcebook is to a sourcebook in the Handbook of Rules and Guidance published by the FCA containing rules made by the FCA under FSMA;

5. (e)

   references to ‘UCITS’ include both UK UCITS and EEA UCITS;

6. (f)

   ‘IP completion day’ has the meaning given in section 39 of the European Union (Withdrawal Agreement) Act 2020.

1For the purposes of this Regulation, the following definitions apply:

1. (a)

   ‘AIF’ has the meaning given in regulation 3 of the Alternative Investment Fund Managers Regulations 2013;

2. (b)

   ‘EEA UCITS’ means a collective investment scheme (as defined in section 235 of FSMA) established in accordance with Directive 2009/65/EC in an EEA State;

3. (c)

   ‘regulated market’ means a regulated market which is a UK regulated market or an EU regulated market, as those terms are defined in Regulation (EU) No 600/2014 on markets in financial instruments (as amended by the Markets in Financial Instruments (Amendment) (EU Exit) Regulations 2018);

4. (d)

   ‘UK UCITS’ has the meaning given in section 237(3) of FSMA;1

5. (e)

   a ‘derivative-based PRIIP’ is a Category 1 PRIIP that is a future, call option, or a put option traded on a regulated market or on a third-country market considered to be equivalent to a regulated market in accordance with Article 28 of Regulation (EU) 600/2014.1

The section in the key information document that relates to the identity of the PRIIP manufacturer and its competent authority shall contain all of the following information:

1. (a)

   the name of the PRIIP assigned by the PRIIP manufacturer and, where present, the PRIIP's International Securities Identification Number or Unique Product Identifier;

2. (b)

   the legal name of the PRIIP manufacturer;

3. (c)

   the PRIIP manufacturer's specific website address providing retail investors with information on how to get in contact with the PRIIP manufacturer, and a telephone number;

4. (e)

   the date of production or, where the key information document has been subsequently revised, the date of the latest revision of the key information document.

Information in the section referred to in the first subparagraph shall also include the comprehension alert referred to in Article 8(3)(b) of Regulation (EU) No 1286/2014 where the PRIIP meets one of the following conditions:

1. (a)

   it is an insurance-based investment product which does not meet the requirements laid down in rule 10A.4.1(2A) of the Conduct of Business sourcebook;

2. (b)

   it is a PRIIP which does not meet the requirements laid down in rule 10A.4.1(2) of the Conduct of Business sourcebook.

1. (1)

   Information relating to the type of the PRIIP in the section entitled "What is this product?" of the key information document shall describe its legal form.

2. (2)

   Information stating the objectives of the PRIIP and the means for achieving those objectives in the section entitled "What is this product?" of the key information document shall be summarised in a brief, clear and easily understandable manner. That information shall identify the main factors upon which return depends, the underlying investment assets or reference values, and how the return is determined, as well as the relationship between the PRIIP's return and that of the underlying investment assets or reference values. That information shall reflect the relationship between the recommended holding period and the risk and reward profile of the PRIIP.

   Where the number of assets or reference values referred to in the first subparagraph is such that specific references to all of them cannot be provided within a key information document, only the market segments or instrument types in respect of the underlying investment assets or reference values shall be identified.

3. (3)

   The description of the type of retail investor to whom the PRIIP is intended to be marketed in the section entitled "What is this product?" of the key information document shall include information on the target retail investors identified by the PRIIP manufacturer, in particular depending on the needs, characteristics and objectives of the type of client for whom the PRIIPs is compatible. This determination shall be based upon the ability of retail investors to bear investment loss and their investment horizon preferences, their theoretical knowledge of, and past experience with PRIIPs, the financial markets as well as the needs, characteristics and objectives of potential end clients.

4. (4)

   The details of insurance benefits in the section entitled "What is this product?" of the key information document shall include in a general summary, namely, the key features of the insurance contract, a definition of each benefit included, with an explanatory statement indicating that the value of those benefits is shown in the section entitled "What are the risks and what I could get in return" and information which reflects the typical biometric characteristics of the target retail investors, showing the overall premium, the biometric risk premium that forms part of that overall premium and either the impact of the biometric risk premium on the investment return at the end of the recommended holding period or the impact of the cost part of the biometric risk premium taken into account in the recurring costs of the "Costs over the time table" calculated in accordance with Annex VII. Where the premium is paid in the form of a single lump sum, the details shall include the amount invested. Where the premium is paid periodically, the number of periodic payments, an estimation of the average biometric risk premium as a percentage of the annual premium, and an estimation of the average amount invested shall be included in the information.

   The details referred to in the first subparagraph shall also include an explanation of the impact of the insurance premium payments, equivalent to the estimated value of insurance benefits, on the returns of the investment for the retail investor.

5. (5)

   The information relating to the term of the PRIIP in the section entitled "What is this product?" of the key information document shall include all of the following:

   1. (a)

      the maturity date of the PRIIP or an indication that there is no maturity date;

   2. (b)

      an indication of whether the PRIIP manufacturer is entitled to terminate the PRIIP unilaterally;

   3. (c)

      a description of the circumstances under which the PRIIP can be automatically terminated, and the termination dates, if known.

1. (1)

   In the section entitled "What are the risks and what could I get in return?" of the key information document, PRIIP manufacturers shall apply the methodology for the presentation of risk as set out in Annex II, include the technical aspects for the presentation of the summary risk indicator as set out in Annex III and comply with the technical guidance, the formats and the criteria for the presentation of performance information, as set out in Annex 4A1.

2. (1A)

   By way of derogation from paragraph 1:1

   1. (a)

      subject to sub-paragraph (b), a PRIIP manufacturer must ensure the summary risk indicator produced via application of the methodology set out in Annex II is appropriate and unlikely to mislead investors in the PRIIP, if necessary by increasing the summary risk indicator that would otherwise be assigned to the PRIIP under that methodology; and1

   2. (b)

      in respect of a PRIIP which is issued by a venture capital trust, a PRIIP manufacturer must assign a summary risk indicator no lower than 6 or 7.1

3. (2)

   In the section entitled "What are the risks and what could I get in return?" of the key information document, PRIIP manufacturers shall include the following:

   1. (a)

      the level of risk of the PRIIP in the form of a risk class by using a summary risk indicator having a numerical scale from 1 to 7;

   2. (b)

      an explicit reference to any illiquid PRIIP or PRIIP with materially relevant liquidity risk, as defined in Part 4 of Annex II, in the form of a warning to this effect in the presentation of the summary risk indicator;

   3. (c)

      a narrative below the summary risk indicator explaining that if a PRIIP is denominated in a currency other than pounds sterling, the return, when expressed in pounds sterling, may change depending on currency fluctuations;

   4. (d)

      a brief description of the PRIIP's risk and reward profile and a warning to the effect that the risk of the PRIIP may be significantly higher than the one represented in the summary risk indicator where the PRIIP is not held to maturity or for the recommended holding period, where appropriate;

   5. (e)

      for PRIIPs with contractually agreed-upon early exit penalties or long disinvestment notice periods, a reference to the relevant underlying conditions in the section "How long should I hold it and can I take money out early?";

   6. (f)

      an indication of the possible maximum loss, and information that the investment may be lost if it is not protected or where the PRIIP manufacturer is unable to pay out, or that necessary additional investment payments to the initial investment may be required and that the total loss may significantly exceed the total initial investment.

4. (3)

   PRIIP manufacturers shall include appropriate information on investment performance, as set out in Annex 4A1 in the section entitled "What are the risks and what could I get in return?" of the key information document. 1

1

1

PRIIP manufacturers shall include the following in the section entitled "What happens if [the name of the PRIIP manufacturer] is unable to pay out?" of the key information document:

1. (a)

   an indication whether the retail investor may face a financial loss due to the default of the PRIIP manufacturer or to the default of an entity other than the PRIIP manufacturer, and the identity of that entity;

2. (b)

   a clarification whether the loss referred to in point (a) is covered by an investor compensation or guarantee scheme, and whether there are any limitations or conditions to that cover.

1. (1)

   PRIIP manufacturers shall apply the following in the section entitled "What are the costs?" of the key information document:

   1. (a)

      the methodology for the calculation of costs set out in Annex VI;

   2. (b)

      the "Costs over time" and "Composition of costs" tables to information on costs, as set out in Annex VII in accordance with the relevant technical guidance therein.

2. (2)

   In the "Costs over time" table in the section entitled "What are the costs?" of the key information document, PRIIP manufacturers shall specify the summary cost indicator of the total aggregated costs of the PRIIP as a single number in monetary and percentage terms for the different time periods set out in Annex VI.

3. (3)

   In the "Composition of costs" table in the section entitled "What are the costs?" of the key information document, PRIIP manufacturers shall specify the following:

   1. (a)

      any one-off costs, as entry and exit costs, presented in percentage terms;

   2. (b)

      any recurring costs, as portfolio transaction costs per year, and other recurring costs per year, presented in percentage terms;

   3. (c)

      any incidental costs, such as performance fees or carried interest, presented in percentage terms.

4. (4)

   PRIIP manufacturers shall insert a description of each of the different costs included in the "Composition of costs" table in the section entitled "What are the costs?" of the key information document, specifying where and how such costs may differ from the actual costs the retail investor may incur or may depend on the retail investor choosing to exercise or not exercise certain options.

PRIIP manufacturers shall include the following in the section entitled "How long should I hold it and can I take my money out early?" of the key information document:

1. (a)

   a brief description of the reasons for the selection of the recommended, or the minimum required, holding period;

2. (b)

   a description of the features of the disinvestment procedure and when disinvestment is possible, including an indication of the impact of cashing-in early on the risk or performance profile of the PRIIP, or on the applicability of capital guarantees;

3. (c)

   information about any fees and penalties which are incurred for disinvestments prior to maturity or any other specified date other than the recommended holding period, including a cross reference to the information on costs to be included in the key information document pursuant to Article 5 and a clarification of the impact of such fees and penalties for different holding periods.

PRIIP manufacturers shall provide the following information in the section entitled "How can I complain?" of the key information document, in summary format:

1. (a)

   steps to be followed for lodging a complaint about the product or about the conduct of the PRIIP manufacturer or the person advising on, or selling, the product;

2. (b)

   a link to the relevant website for such complaints;

3. (c)

   an up-to-date postal address and an email address to which such complaints may be submitted.

1. (1)

   PRIIP manufacturers shall indicate in the section entitled "Other relevant information" of the key information document any additional information documents that may be provided, and whether such additional information documents are made available based on a legal requirement or only at the request of the retail investor.

2. (2)

   The information included in the section entitled "Other relevant information" of the key information document may be provided in summary format, including a link to the website where further details other than the documents referred to in paragraph 1 are made available.

PRIIP manufacturers shall present the key information document by means of the template laid down in Annex I. The template shall be completed in accordance with the requirements set out in this Delegated Regulation and in Regulation (EU) No 1286/2014.