Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) (Text with EEA relevance)

9.12.2014

EN

Official Journal of the European Union

L 352/1

(1)

Retail investors are increasingly offered a wide variety of packaged retail and insurance-based investment products (PRIIPs) when they consider making an investment. Some of these products provide specific investment solutions tailored to the needs of retail investors, are frequently combined with insurance coverage or can be complex and difficult to understand. Existing disclosures to retail investors for such PRIIPs are uncoordinated and often do not help retail investors to compare different products, or understand their features. Consequently, retail investors have often made investments without understanding the associated risks and costs and have, on occasion, suffered unforeseen losses.

(2)

Improving the transparency of PRIIPs offered to retail investors is an important investor protection measure and a precondition for rebuilding the confidence of retail investors in the financial market, in particular in the aftermath of the financial crisis. First steps in this direction have already been taken at Union level through the development of the key investor information regime established by Directive 2009/65/EC of the European Parliament and of the Council (3).

(3)

The existence of different rules on PRIIPs, that vary according to the industry offering the PRIIPs and differences in national regulation in this area create an unlevel playing field between different products and distribution channels, erecting additional barriers to an internal market in financial services and products. Member States have already taken divergent and uncoordinated action to address shortcomings in investor protection measures and it is likely that this development would continue. Divergent approaches to disclosures relating to PRIIPs impede the development of a level playing field between different PRIIP manufacturers and those advising on, or selling, these products, and thus distort competition and lead to unequal levels of investor protection within the Union. Such divergence represents an obstacle to the establishment and smooth functioning of the internal market.

(4)

To prevent divergence, it is necessary to establish uniform rules on transparency at Union level which will apply to all participants in the PRIIPs market and thereby enhance investor protection. A regulation is necessary to ensure that a common standard for key information documents is established in a uniform fashion so as to be able to harmonise the format and the content of those documents. The directly applicable rules of a regulation should ensure that all those advising on, or selling, PRIIPs are subject to uniform requirements in relation to the provision of the key information document to retail investors. This Regulation has no effect on the supervision of advertising documents. Moreover, it has no effect on product intervention measures other than in relation to insurance-based investment products.

(5)

Whilst improving disclosures relating to PRIIPs is essential in rebuilding the trust of retail investors in the financial markets, effectively regulated sales processes for those products are equally important. This Regulation is complementary to measures on distribution in Directive 2014/65/EU of the European Parliament and of the Council (4). It is also complementary to measures taken on the distribution of insurance products in Directive 2002/92/EC of the European Parliament and of the Council (5).

(6)

This Regulation should apply to all products, regardless of their form or construction, that are manufactured by the financial services industry to provide investment opportunities to retail investors, where the amount repayable to the retail investor is subject to fluctuation because of exposure to reference values, or subject to the performance of one or more assets which are not directly purchased by the retail investor. Those products should be known as PRIIPs for the purposes of this Regulation and should include, among other things, investment products such as investment funds, life insurance policies with an investment element, structured products and structured deposits. Financial instruments issued by special purpose vehicles that conform to the definition of PRIIPs should also fall within the scope of this Regulation. For all those products, investments are not of the direct kind that is achieved when buying or holding assets themselves. Instead these products intercede between the retail investor and the markets through a process of packaging or wrapping together assets so as to create different exposures, provide different product features, or achieve different cost structures as compared with a direct holding. Such packaging can allow retail investors to engage in investment strategies that would otherwise be inaccessible or impractical, but can also require additional information to be made available, in particular to enable comparisons between different ways of packaging investments.

(7)

In order to ensure that this Regulation applies solely to such PRIIPs, insurance products that do not offer investment opportunities and deposits solely exposed to interest rates should be excluded from the scope of this Regulation. In the case of life insurance products, the term ‘capital’ means capital that is invested on the request of the retail investor. In addition, any deposit or certificates which represent traditional deposits, other than structured deposits as defined in point (43) of Article 4(1) of Directive 2014/65/EU should be excluded from the scope of this Regulation. Assets that are held directly, such as corporate shares or sovereign bonds, are not PRIIPs, and should therefore be excluded from the scope of this Regulation. Investment funds dedicated to institutional investors are excluded from the scope of this Regulation since they are not for sale to retail investors. Individual and occupational pension products, recognised under national law as having the primary purpose of providing the investor with an income in retirement, should be excluded from the scope of this Regulation, in consideration of their peculiarities and objectives, whereas other individual insurance accumulation or saving products that offer investment opportunities should be covered by this Regulation.

(8)

This Regulation does not prejudice the right of Member States to regulate the provision of key information on products that fall outside its scope. In accordance with their mandate for consumer protection under Article 9 of Regulation (EU) No 1093/2010 of the European Parliament and of the Council (6), of Regulation (EU) No 1094/2010 of the European Parliament and of the Council (7) and of Regulation (EU) No 1095/2010 of the European Parliament and of the Council (8), the European Supervisory Authority (European Banking Authority) (‘EBA’), the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (‘EIOPA’) and the European Supervisory Authority (European Securities and Markets Authority) (‘ESMA’) established by those Regulations (the ‘ESAs’) should monitor the products which are excluded from the scope of this Regulation and, where appropriate, should issue guidelines to address any problem which is identified. Such guidelines should be taken into account in the review, to be conducted four years after the entry into force of this Regulation, on the possible extension of the scope and the elimination of certain exclusions.

(9)

To provide clarity on the relationship between the obligations established by this Regulation and obligations established by other legislative acts requiring the provision of information to investors, including but not limited to Directive 2003/71/EC of the European Parliament and of the Council (9) and Directive 2009/138/EC of the European Parliament and of the Council (10), it is necessary to establish that those legislative acts continue to apply in addition to this Regulation.

(10)

To ensure orderly and effective supervision of compliance with the requirements of this Regulation, Member States should designate the competent authorities responsible for that supervision. In many cases, competent authorities are already designated to supervise other obligations of PRIIP manufacturers, sellers or advisors, arising from other provisions of national and Union law.

(11)

The competent authorities should be provided, upon request and including ex ante, with all necessary information to verify the contents of the key information documents, to assess compliance with this Regulation and to ensure the protection of clients and investors in financial markets.

(12)

PRIIP manufacturers — such as fund managers, insurance undertakings, credit institutions or investment firms — should draw up the key information document for the PRIIPs that they manufacture, as they are in the best position to know the product. They should also be responsible for the accuracy of the key information document. The key information document should be drawn up by the PRIIP manufacturer before the product can be sold to retail investors. However, where a product is not sold to retail investors, there should be no obligation to draw up a key information document, and where it is impractical for the PRIIP manufacturer to draw up the key information document, it should remain possible for this task to be delegated to others. The obligations under this Regulation which are laid down in the provisions on drawing up, and the rules on revision of, the key information document should apply only to the PRIIP manufacturer and should continue to apply for as long as the PRIIP is traded on secondary markets. In order to ensure widespread dissemination and availability of key information documents, this Regulation should provide for publication by the PRIIP manufacturer of key information documents on its website.

(13)

To meet the needs of retail investors, it is necessary to ensure that information on PRIIPs is accurate, fair, clear and not misleading for those retail investors. This Regulation should therefore lay down common standards for the drafting of the key information document, in order to ensure that it is comprehensible to retail investors. Given the difficulties many retail investors have in understanding specialist financial terminology, particular attention should be paid to the vocabulary and style of writing used in the document. Rules should also be laid down on the language in which the key information document should be drawn up. Furthermore, retail investors should be able to understand the key information document on its own without referring to other non-marketing information.

(14)

When developing the technical standards for the content of the key information document so as to reflect accurately the product’s investment policies and its objectives in accordance with this Regulation, the ESAs should ensure that the PRIIP manufacturer uses clear and understandable language which is accessible to retail investors and that the description of how the investment targets are achieved, including the description of the financial instruments used, avoids financial jargon and terminology which is not immediately clear to retail investors.

(15)

Retail investors should be provided with the information necessary for them to make an informed investment decision and compare different PRIIPs, but unless the information is short and concise there is a risk that they will not use it. The key information document should therefore only contain key information, in particular as regards the nature and features of the product, including whether it is possible to lose capital, the costs and risk profile of the product, as well as relevant performance information, and certain other specific information which may be necessary for understanding the features of individual types of product.

(16)

Investment product calculators are already being developed at national level. However, in order that the calculators are as useful as possible to consumers, they should cover the costs and fees charged by the various PRIIP manufacturers, together with any further costs or fees charged by intermediaries or other parts of the investment chain not already included by the PRIIP manufacturers. The Commission should report on whether those tools are available on-line in each Member State and whether they provide for reliable and accurate computations of aggregate costs and fees for all products within the scope of this Regulation.

(17)

The key information document should be drawn up in a standardised format which allows retail investors to compare different PRIIPs, since consumer behaviour and capabilities are such that the format, presentation and content of information must be carefully calibrated to maximise understanding and use of information. The same order of items and headings for these items should be followed for each document. In addition, the details of the information to be included in the key information document for different PRIIPs and the presentation of this information should be further harmonised through regulatory technical standards that take into account existing and ongoing research into consumer behaviour, including results from testing the effectiveness of different ways of presenting information with consumers. In addition, some PRIIPs give the retail investor a choice between multiple underlying investments, such as internal funds held by insurance undertakings. Those products should be taken into account when drawing up the format.

(18)

As some of the investment products within the scope of this Regulation are not simple and may be difficult for retail investors to understand, the key information document should, where applicable, include a comprehension alert to the retail investor. A product should be regarded as not being simple and as being difficult to understand in particular if it invests in underlying assets in which retail investors do not commonly invest, if it uses a number of different mechanisms to calculate the final return of the investment, creating a greater risk of misunderstanding on the part of the retail investor or if the investment’s pay-off takes advantage of retail investor’s behavioural biases, such as a teaser rate followed by a much higher floating conditional rate, or an iterative formula.

(19)

Increasingly, retail investors pursue, along with the financial returns on their investment, additional purposes such as social or environmental goals. However, information on social or environmental outcomes sought by the PRIIP manufacturer can be difficult to compare or may be absent. Therefore, anticipated sustainable environmental and social developments in financial investments, as well as the application of Regulation (EU) No 346/2013 of the European Parliament and of the Council (11) could allow for such aspects to be more appropriately integrated into, and further fostered by, Union law. However there are no established criteria and there is no formal procedure to verify such social or environmental criteria objectively, as there already are in the food sector. Therefore, it is desirable that in its review of this Regulation the Commission thoroughly considers developments relating to social and environmental investment products and the outcome of the review of Regulation (EU) No 346/2013.

(20)

The key information document should be clearly distinguishable and separate from any marketing communications.

(21)

To ensure that the information in the key information document is reliable, PRIIP manufacturers should be required to keep the key information document up to date. To that end, it is necessary to establish detailed rules relating to the conditions and frequency of the review of the information and the revision of the key information document in regulatory technical standards to be adopted by the Commission.

(22)

Key information documents are the foundation for investment decisions by retail investors. For that reason, PRIIP manufacturers have a significant responsibility towards retail investors in ensuring that they are not misleading, inaccurate or inconsistent with the relevant parts of the contractual documents of the PRIIP. It is therefore important to ensure that retail investors have an effective right of redress. It should also be ensured that all retail investors across the Union have the same right to seek compensation for damage suffered due to failure to comply with this Regulation. Therefore, rules regarding the civil liability of the PRIIP manufacturers should be harmonised. Retail investors should be able to hold the PRIIP manufacturer liable for an infringement of this Regulation where damage is suffered as a result of reliance on a key information document that is inconsistent with pre-contractual or contractual documents under the PRIIP manufacturer’s control, or is misleading or inaccurate.

(23)

Matters concerning the civil liability of a PRIIP manufacturer which are not covered by this Regulation should be governed by the applicable national law. The court competent to decide on a claim for civil liability brought by a retail investor should be determined by the relevant rules on international jurisdiction.

(24)

This Regulation does not introduce a passport allowing for the cross-border sale or marketing of PRIIPs to retail investors, or alter existing passport arrangements for the cross-border sale or marketing of PRIIPs, if any. This Regulation does not alter the allocation of responsibilities between existing competent authorities under existing passport arrangements. Competent authorities designated by Member States for the purposes of this Regulation should therefore be consistent with those competent for the marketing of PRIIPs under an existing passport, if any. The competent authority of the Member State where the PRIIP is marketed should be responsible for supervision of the marketing of that PRIIP. The competent authority of the Member State where the product is marketed should always have the right to suspend the marketing of a PRIIP within their territory in cases of non-compliance with this Regulation.

(25)

The powers of EIOPA and the relevant competent authorities should be complemented by an explicit mechanism for prohibiting or restricting the marketing, distribution and sale of insurance-based investment products giving rise to serious concerns regarding investor protection, orderly functioning and integrity of financial markets, or the stability of the whole or part of the financial system, together with appropriate coordination and contingency powers for EIOPA. Those powers should also reflect the powers conferred on ESMA and EBA under Regulation (EU) No 600/2014 of the European Parliament and of the Council (12) so as to ensure that such mechanisms for intervention can be applied for all investment products irrespective of their legal form. The exercise of such powers by competent authorities and, in exceptional cases, by EIOPA should be subject to the need to fulfil a number of specific conditions. Where those conditions are met, the competent authority or, in exceptional cases, EIOPA should be able to impose a prohibition or restriction on a precautionary basis before an insurance-based investment product has been marketed, distributed or sold to investors. Those powers do not imply any requirement to introduce or apply product approval or licensing by the competent authority or by EIOPA, and do not relieve the manufacturer of an insurance-based investment product of its responsibility to comply with all the relevant requirements of this Regulation. Moreover, those powers should be used exclusively in the public interest and should not give rise to civil liability on the part of the competent authorities.

(26)

In order for the retail investor to be able to make an informed investment decision, persons advising on or selling PRIIPs should be required to provide the key information document in good time before any transaction is concluded. This requirement should apply irrespective of where or how the transaction takes place. However, where the transaction is by means of distance communication, the key information document may be provided immediately after the transaction is concluded as long as it is not possible to provide the key information document in advance and the retail investor consents. Persons advising on, or selling, PRIIPs include intermediaries and the PRIIP manufacturers themselves where the PRIIP manufacturers choose to advise on, or sell, the PRIIP directly to retail investors. This Regulation is without prejudice to Directive 2000/31/EC of the European Parliament and of the Council (13) and to Directive 2002/65/EC of the European Parliament and of the Council (14).

(27)

Uniform rules should be laid down in order to give the person advising on, or selling, the PRIIP a certain choice with regard to the medium in which the key information document is provided to retail investors, allowing for use of electronic communications where appropriate having regard to the circumstances of the transaction. However, the retail investor should be given the option to receive it on paper. In the interest of consumer access to information, the key information document should always be provided free of charge.

(28)

To ensure the trust of retail investors in PRIIPs and in financial markets as a whole, requirements should be established for appropriate internal procedures which ensure that retail investors receive a substantive response from the PRIIP manufacturer to complaints.

(29)

As the key information documents for PRIIPs should be produced by entities operating in the banking, insurance, securities and fund sectors of the financial markets, it is of utmost importance to ensure smooth cooperation between the various authorities supervising PRIIP manufacturers and persons advising on, or selling, PRIIPs so that they have a common approach to the application of this Regulation.

(30)

In line with the Commission Communication of 8 December 2010 entitled ‘Reinforcing sanctioning regimes in the financial services sector’ and in order to ensure that the requirements of this Regulation are fulfilled, it is important that Member States take necessary steps to ensure that infringements of this Regulation are subject to appropriate administrative penalties and measures. In order to ensure that penalties have a dissuasive effect and to strengthen investor protection by warning them about PRIIPs marketed in infringement of this Regulation, sanctions and measures should normally be published, except in certain well-defined circumstances.

(31)

Although Member States may lay down rules for administrative and criminal penalties for the same infringements, Member States should not be required to lay down rules for administrative penalties for the infringements of this Regulation which are subject to national criminal law. In accordance with national law, Member States are not obliged to impose both administrative and criminal penalties for the same offence, but they should be able to do so if their national law so permits. However, the maintenance of criminal penalties instead of administrative penalties for infringements of this Regulation should not reduce or otherwise affect the ability of competent authorities to cooperate, access and exchange information in a timely way with competent authorities in other Member States for the purposes of this Regulation, including after any referral of the relevant infringements to the competent judicial authorities for criminal prosecution.

(32)

In order to fulfil the objectives of this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of specifying the details of the procedures used to establish whether a PRIIP targets specific environmental or social objectives, and the conditions for the exercise of intervention powers by EIOPA and the competent authorities. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.

(33)

The Commission should adopt draft regulatory technical standards developed by the ESAs, through the Joint Committee, with regard to the presentation and the content of the key information document, the standardised format of the key information document, the methodology underpinning the presentation of risk and reward and the calculation of costs, as well as the conditions and the minimum frequency for reviewing the information contained in the key information document and the conditions fulfilling the requirement on the provision of the key information document to retail investors in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of Regulation (EU) No 1095/2010. The Commission should complement the technical work of the ESAs by conducting consumer tests of the presentation of the key information document as proposed by the ESAs.

(34)

Directive 95/46/EC of the European Parliament and of the Council (15) governs the processing of personal data carried out in the Member States in the context of this Regulation and under the supervision of the competent authorities. Regulation (EC) No 45/2001 of the European Parliament and of the Council (16), governs the processing of personal data carried out by the ESAs pursuant to this Regulation and under the supervision of the European Data Protection Supervisor. Any processing of personal data carried out within the framework of this Regulation, such as the exchange or transmission of personal data by the competent authorities should be undertaken in accordance with Directive 95/46/EC and any exchange or transmission of information by the ESAs should be undertaken in accordance with Regulation (EC) No 45/2001.

(35)

While undertakings for collective investment in transferable securities (UCITS) constitute investment products within the meaning of this Regulation, the recent establishment of the key investor information requirements under Directive 2009/65/EC means that it would be proportionate to provide to such UCITS a transitional period of five years after the entry into force of this Regulation during which they would not be subject to this Regulation. After the expiry of that transitional period and in the absence of any extension thereto, UCITS should become subject to this Regulation. That transitional period should also apply to management companies, investment companies and persons advising on, or selling, units of non-UCITS funds when a Member State applies rules on the format and content of the key information document, as laid down in Articles 78 to 81 of Directive 2009/65/EC, to such funds.

(36)

A review of this Regulation should be carried out four years after its entry into force in order to take account of market developments, such as the emergence of new types of PRIIPs, as well as developments in other areas of Union law and the experiences of Member States. The review should also assess the feasibility, costs and possible benefits of introducing a label for social and environmental investments. Furthermore, the review should assess whether the measures introduced have improved the average retail investor understanding of PRIIPs and the comparability of the PRIIPs. It should also consider whether the transitional period applying to UCITS or certain non-UCITS should be extended, or whether other options for the treatment of such funds might be considered. In addition, it should assess whether the exemption of products from the scope of this Regulation should be maintained, in view of the need for sound standards of consumer protection including comparisons between financial products. As part of the review, the Commission should also carry out a market survey to determine whether there are online calculator tools available in the market which allow the retail investor to compute the aggregate costs and fees of PRIIPs and whether those tools are made available free of charge. On the basis of that review, the Commission should submit a report to the European Parliament and to the Council accompanied, if appropriate, by legislative proposals.

(37)

Having regard to the ongoing work undertaken by EIOPA on disclosure of product information requirements for personal pension products and taking into account the specificities of those products, the Commission should, within four years after the entry into force of this Regulation, assess whether to maintain the exclusion of pension products which, under national law, are recognised as having the primary purpose of providing the investor with an income in retirement, and which entitle the investor to certain benefits. In making its assessment, the Commission should consider whether this Regulation is the best legislative mechanism for ensuring the disclosure relating to pension products, or whether other disclosure mechanisms would be more appropriate.

(38)

In order to give PRIIP manufacturers and persons advising on, or selling, PRIIPs sufficient time to prepare for the practical application of the requirements of this Regulation, it should not be applicable until two years after the date of its entry into force.

(39)

This Regulation respects fundamental rights and observes the principles recognised in particular by the Charter of the Fundamental Rights of the European Union.

(40)

Since the objectives of this Regulation, namely to enhance retail investor protection and improve retail investor confidence in PRIIPs, including where those products are sold cross-border, cannot be sufficiently achieved by the Member States but can rather, by reason of its effects, be better achieved at Union level the Union may adopt measures, in accordance with principle of subsidiarity as set out in Article 5 of the Treaty of the European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.

(41)

The European Data Protection Supervisor was consulted in accordance with Article 28(2) of Regulation (EC) No 45/2001 and delivered its opinion (17),

(a)

non-life insurance products as listed in Annex I to Directive 2009/138/EC;

(b)

life insurance contracts where the benefits under the contract are payable only on death or in respect of incapacity due to injury, sickness or infirmity;

(c)

deposits other than structured deposits as defined in point (43) of Article 4(1) of Directive 2014/65/EU;

(d)

securities as referred to in points (b) to (g), (i) and (j) of Article 1(2) of Directive 2003/71/EC;

(e)

pension products which, under national law, are recognised as having the primary purpose of providing the investor with an income in retirement and which entitle the investor to certain benefits;

(f)

officially recognised occupational pension schemes within the scope of Directive 2003/41/EC of the European Parliament and of the Council (18) or Directive 2009/138/EC;

(g)

individual pension products for which a financial contribution from the employer is required by national law and where the employer or the employee has no choice as to the pension product or provider.

(1)

‘packaged retail investment product’ or ‘PRIP’ means an investment, including instruments issued by special purpose vehicles as defined in point (26) of Article 13 of Directive 2009/138/EC or securitisation special purpose entities as defined in point (an) of Article 4(1) of the Directive 2011/61/EU of the European Parliament and of the Council (19), where, regardless of the legal form of the investment, the amount repayable to the retail investor is subject to fluctuations because of exposure to reference values or to the performance of one or more assets which are not directly purchased by the retail investor;

(2)

‘insurance-based investment product’ means an insurance product which offers a maturity or surrender value and where that maturity or surrender value is wholly or partially exposed, directly or indirectly, to market fluctuations;

(3)

‘packaged retail and insurance-based investment product’ or ‘PRIIP’ means a product that is one or both of the following:

(4)

‘packaged retail and insurance-based investment product manufacturer’ or ‘PRIIP manufacturer’ means:

(5)

‘person selling a PRIIP’ means a person offering or concluding a PRIIP contract with a retail investor;

(6)

‘retail investor’ means:

(7)

‘durable medium’ means a durable medium as defined in point (m) of Article 2(1) of Directive 2009/65/EC;

(8)

‘competent authorities’ means the national authorities designated by a Member State to supervise the requirements this Regulation places on PRIIP manufacturers and the persons advising on, or selling, the PRIIP.

(a)

be presented and laid out in a way that is easy to read, using characters of readable size;

(b)

focus on the key information that retail investors need;

(c)

be clearly expressed and written in language and a style that communicate in a way that facilitates the understanding of the information, in particular, in language that is clear, succinct and comprehensible.

(a)

at the beginning of the document, the name of the PRIIP, the identity and contact details of the PRIIP manufacturer, information about the competent authority of the PRIIP manufacturer and the date of the document;

(b)

where applicable, a comprehension alert which shall read: ‘You are about to purchase a product that is not simple and may be difficult to understand.’;

(c)

under a section titled ‘What is this product?’, the nature and main features of the PRIIP, including:

(d)

under a section titled ‘What are the risks and what could I get in return?’, a brief description of the risk-reward profile comprising the following elements:

(e)

under a section titled ‘What happens if [the name of the PRIIP manufacturer] is unable to pay out?’, a brief description of whether the related loss is covered by an investor compensation or guarantee scheme and if so, which scheme it is, the name of the guarantor and which risks are covered by the scheme and which are not;

(f)

under a section titled ‘What are the costs?’, the costs associated with an investment in the PRIIP, comprising both direct and indirect costs to be borne by the retail investor, including one-off and recurring costs, presented by means of summary indicators of these costs and, to ensure comparability, total aggregate costs expressed in monetary and percentage terms, to show the compound effects of the total costs on the investment.

The key information document shall include a clear indication that advisors, distributors or any other person advising on, or selling, the PRIIP will provide information detailing any cost of distribution that is not already included in the costs specified above, so as to enable the retail investor to understand the cumulative effect that these aggregate costs have on the return of the investment;

(g)

under a section titled ‘How long should I hold it and can I take money out early?’

(h)

under a section titled ‘How can I complain?’, information about how and to whom a retail investor can make a complaint about the product or the conduct of the PRIIP manufacturer or a person advising on, or selling, the product;

(i)

under a section titled ‘Other relevant information’, a brief indication of any additional information documents to be provided to the retail investor at the pre-contractual and/or the post-contractual stage, excluding any marketing material.

(a)

the details of the presentation and the content of each of the elements of information referred to in paragraph 3;

(b)

the methodology underpinning the presentation of risk and reward as referred to in points (d) (i) and (iii) of paragraph 3; and

(c)

the methodology for the calculation of costs, including the specification of summary indicators, as referred to in point (f) of paragraph 3.

(a)

the conditions for reviewing the information contained in the key information document;

(b)

the conditions under which the key information document must be revised;

(c)

the specific conditions under which information contained in the key information document must be reviewed or the key information document revised where a PRIIP is made available to retail investors in a non-continuous manner;

(d)

the circumstances in which retail investors are to be informed about a revised key information document for a PRIIP purchased by them, as well as the means by which the retail investors are to be informed.

(a)

the retail investor chooses, on his own initiative, to contact the person selling a PRIIP and conclude the transaction using a means of distance communication;

(b)

provision of the key information document in accordance with paragraph 1 of this Article is not possible;

(c)

the person advising on or selling the PRIIP has informed the retail investor that provision of the key information document is not possible and has clearly stated that the retail investor may delay the transaction in order to receive and read the key information document before concluding the transaction;

(d)

the retail investor consents to receiving the key information document without undue delay after conclusion of the transaction, rather than delaying the transaction in order to receive the document in advance.

(a)

on paper, which should be the default option where the PRIIP is offered on a face-to-face basis, unless the retail investor requests otherwise;

(b)

using a durable medium other than paper, where the conditions laid down in paragraph 4 are met; or

(c)

by means of a website where the conditions laid down in paragraph 5 are met.

(a)

the use of the durable medium is appropriate in the context of the business conducted between the person advising on, or selling, a PRIIP and the retail investor; and

(b)

the retail investor has been given the choice between information on paper and in the durable medium, and has chosen that other medium in a way that can be evidenced.

(a)

the provision of the key information document by means of a website is appropriate in the context of the business conducted between the person advising on, or selling, a PRIIP and the retail investor;

(b)

the retail investor has been given the choice between information provided on paper and by means of a website and has chosen the latter in a way that can be evidenced;

(c)

the retail investor has been notified electronically, or in written form, of the address of the website, and the place on the website where the key information document can be accessed;

(d)

the key information document remains accessible on the website, capable of being downloaded and stored in a durable medium, for such period of time as the retail investor may need to consult it.

(a)

the marketing, distribution or sale of certain insurance-based investment products or insurance-based investment products with certain specified features; or

(b)

a type of financial activity or practice of an insurance or reinsurance undertaking.

(a)

the proposed action addresses a significant investor protection concern or a threat to the orderly functioning and integrity of financial markets or to the stability of the whole or part of the financial system in the Union;

(b)

regulatory requirements under Union law that are applicable to the relevant insurance-based investment product or activity do not address the threat;

(c)

a competent authority or competent authorities have not taken action to address the threat or the actions that have been taken do not adequately address the threat.

(a)

have a detrimental effect on the efficiency of financial markets or on investors that is disproportionate to the benefits of the action; or

(b)

create a risk of regulatory arbitrage.

(a)

the degree of complexity of the insurance-based investment product and the relation to the type of investor to whom it is marketed and sold;

(b)

the size or the notional value of the insurance-based investment product;

(c)

the degree of innovation of the insurance-based investment product, activity or a practice; and

(d)

the leverage a product or practice provides.

(a)

the marketing, distribution or sale of insurance-based investment products or insurance-based investment products with certain specified features; or

(b)

a type of financial activity or practice of an insurance or reinsurance undertaking.

(a)

an insurance-based investment product, or activity or practice gives rise to significant investor protection concerns or poses a threat to the orderly functioning and integrity of financial markets or the stability of whole or part of the financial system within at least one Member State;

(b)

existing regulatory requirements under Union law applicable to the insurance-based investment product, or activity or practice do not sufficiently address the risks referred to in point (a) and the issue would not be better addressed by improved supervision or enforcement of existing requirements;

(c)

the action is proportionate taking into account the nature of the risks identified, the level of sophistication of investors or market participants concerned and the likely effect of the action on investors and market participants who may hold, use or benefit from the insurance-based investment product, or activity or practice;

(d)

the competent authority has properly consulted competent authorities in other Member States that may be significantly affected by the action; and

(e)

the action does not have a discriminatory effect on services or activities provided from another Member State.

(a)

the insurance-based investment product, or activity or practice to which the proposed action relates;

(b)

the precise nature of the proposed prohibition or restriction and when it is intended to take effect; and

(c)

the evidence upon which it has based its decision and upon which it is satisfied that each of the conditions in paragraph 2 are met.

(a)

the degree of complexity of an insurance-based investment product and the relation to the type of investor to whom it is marketed and sold;

(b)

the degree of innovation of an insurance-based investment product, an activity or a practice;

(c)

the leverage a product or practice provides;

(d)

in relation to the orderly functioning and integrity of financial markets, the size or the notional value of an insurance-based investment product.

(a)

retail investors have an effective way of submitting a complaint against the PRIIP manufacturer;

(b)

retail investors who have submitted a complaint in relation to the key information document receive a substantive reply in a timely and proper manner; and

(c)

effective redress procedures are also available to retail investors in the event of cross-border disputes, in particular where the PRIIP manufacturer is located in another Member State or in a third country.

(a)

directly;

(b)

in collaboration with other authorities;

(c)

under their responsibility by delegation to such authorities;

(d)

by application to the competent judicial authorities.

(a)

an order prohibiting the marketing of a PRIIP;

(b)

an order suspending the marketing of a PRIIP;

(c)

a public warning which indicates the person responsible for, and the nature of, the infringement;

(d)

an order prohibiting the provision of a key information document which does not comply with the requirement of Articles 6, 7, 8 or 10 and requiring the publication of a new version of a key information document;

(e)

administrative fines of at least:

(a)

the gravity and the duration of the infringement;

(b)

the degree of responsibility of the person responsible for the infringement;

(c)

the impact of the infringement on retail investors’ interests;

(d)

the cooperative behaviour of the person responsible for the infringement;

(e)

any previous infringements by the person responsible for the infringement;

(f)

measures taken after the infringement by the person responsible for the infringement to prevent its repetition.

(a)

specific procedures for the receipt of reports of actual or potential infringements and their follow-up;

(b)

appropriate protection for employees who report infringements committed within their employer at least against retaliation, discrimination and other types of unfair treatment;

(c)

protection of the identity both of the person who reports the infringements and the natural person who is allegedly responsible for an infringement, at all stages of the procedure unless such disclosure is required by national law in the context of further investigation or subsequent judicial proceedings.

(a)

the type and nature of the infringement;

(b)

the identity of the persons responsible.

(a)

delay the publication of the decision to impose a sanction or a measure until the moment where the reasons for non-publication cease to exist;

(b)

publish the decision to impose a sanction or a measure on an anonymous basis in a manner which complies with national law, if such anonymous publication ensures an effective protection of the personal data concerned; or

(c)

not publish the decision to impose a sanction or measure in the event that the options laid down in points (a) and (b) are considered to be insufficient to ensure: