New KIDs on the block

The New Year has brought about significant changes for the investment industry. One challenging regulation to implement was the new KIDs (Key Investment Documents) for PRIIPs (Packaged Retail and Insurance-based Investment Products) regulation, whereby additional information must be made available for viewing before trade deals are conducted. The new regulations affect a range of fund types including investment trusts, Venture Capital Trusts (VCTs), Exchange-Traded Funds (ETFs) and debt securities. Every PRIIP designated security on retail platforms must have a KID available for potential investors as of 1st January 2018.

The exercise to have KIDS available for PRIIP instruments on investment platforms by the beginning of January has required a huge effort across the investment industry, both for the product manufacturer to prepare the regulatory documents, as well as for retail distributors and investment platforms. The scope of the regulation encompasses all types of funds including investment trusts, VCTs and ETFs. The new documents are actually very similar to the KIIDs (Key Investor Information Documents) introduced in 2012. However, there are some additional pieces of information to look out for. Namely, more detailed product information, forward looking performance scenarios over one, three and five years and investment duration recommendations. They also include details of the complaints procedure. It is also worth noting that KIDs are likely to replace KIIDs – so watch this space.

In its pivotal role of managing fund data for asset managers and being an aggregated source of data for the investment platforms and wealth advisers, FundsLibrary’s data management team has been busy communicating and guiding around 500 manufacturer clients – such as asset managers and distributor clients, including 14 of the top 20 investment platforms – on ensuring compliance across as many securities as possible on day one of the regulation.

Our team helped all our investment platform clients to exceed 90% coverage of KIDs available in the market by sourcing and distributing the regulatory documents using the company’s proven Regulatory Distribution Network (RDN), which distributes 27,000 KIIDs annually.

James Rodgers, Head of Data Services at FundsLibrary explains:

“We started preparing with our clients in August 2017 but, with other conflicting priorities within the industry such as MiFID II, limited progress was made until much nearer the deadline. In mid- December we took stock of the need for KIDs across our client base – this amounted to over 1,000. However, at that time we had established less than 10% coverage against total required. Between that time and start of business in 2018 we worked with our clients to get the coverage to over 95% across the board. In the case of one of the largest platforms, Fidelity, we achieved 100%. Our teams worked throughout the holiday period to ensure our clients would have the highest standards of compliance at start of business on 2nd January. I am extremely proud of what we were able to achieve for our clients.”

 

For more information about FundsLibrary’s regulatory services, you can reach the team on
+44 117 980 9994. Existing clients should contact their FundsLibrary Data or Client Services Manager.

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