PRIIPs and other product information documents

Under the European PRIIPs Regulation¹, manufacturers of packaged retail and insurance-based investment products (PRIIPs) have to publish key information documents (KIDs). Anyone who sells, or gives advice on, such products will have to provide retail investors with these information documents (PRIIPs KIDs) before they sign a binding contract or offer. The Regulation, which entered into force on 1 January 2018, specifies the form and content of the key information documents. The PRIIPs Regulation applies directly and, being a European legislative act, takes priority over national regulations.

The requirements of the PRIIPs Regulation for KIDs are supplemented by a Delegated Regulation². In addition, the Joint Committee of the three European Supervisory Authorities (ESAs) makes available interpretive guidance in the form of questions and answers (Q&As) and flowcharts.³ BaFin was involved in drafting the supplementary legislative acts as well as in working on the interpretive guidance as part of the Joint Committee.

In addition to the PRIIPs key information document, other information documents have been developed at the European level. They have also been in use since the beginning of 2018.

IPID

The Implementing Regulation laying down a standardised presentation format for the insurance product information document in Germany for non-life insurance products (property and casualty insurance and including private health insurance) requires insurance undertakings to use an insurance product information document (IPID) that meets the formal requirements of this Implementing Regulation.⁴ As a member of the European Insurance and Occupational Pensions Authority (EIOPA), BaFin was actively involved in developing the implementing technical standard on which this Regulation is based.

Fee information document and statement of fees

On the basis of its mandate under the Payment Accounts Directive (PAD)⁵, the European Banking Authority (EBA) has also developed regulatory technical standards for product information documents. BaFin was also involved in this work. These standards define the terminology of the payment accounts services that are most frequently used in the member states. The implementing technical standards on the "fee information document" and the "statement of fees" contain rules for standardising these information documents throughout the EU. They are aimed at making it easier for consumers to gain an overview of the costs of account services and to compare them.

The European Commission developed delegated acts on the basis of these drafts prepared by the EBA.⁶ Their entry into force on 31 January 2018 marked the start of the nine-month implementation period for institutions and national competent authorities. In Germany, the final part of the German Payment Accounts Act (Zahlungskontengesetz), which deals with fee transparency, will therefore enter into force as at 31 October 2018. Payment service providers will then be required to use the standardised terminology and inform consumers using standardised documents, firstly on the expected fees (fee information) prior to the contract and secondly on the costs actually levied (statement of fees) during the current contract and on termination of the contractual relationship.

World Investor Week

The first ever World Investor Week (WIW), an initiative of the International Organization of Securities Commissions (IOSCO), was held at the beginning of October 2017. This global event was aimed at educating consumers about financial issues. BaFin's contribution to WIW included a guide to investing for people in retirement (Geld anlegen im Ruhestand) and an investment primer written in simple language (Das Kleine ABC der Geld-Anlage in Leichter Sprache). The primer expands BaFin's range of simple-language documents available on its website. As part of WIW, BaFin also published a video about investing on its website, in which representatives of BaFin provide hints on how to make personal preparations for a meeting with the investment adviser.