Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2009/65/EC as regards the use of key information documents by management companies of undertakings for collective investment in transferable securities (UCITS)
Date: 2021-07-15
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: approximation of laws, consumer information, disclosure of information, financial legislation, financial services, investment company, investment protection, regulation of investments, securities

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   EUROPEAN COMMISSION  Brussels, 15.7.2021  COM(2021) 399 final 2021/0219 (COD)  Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2009/65/EC as regards the use of key information documents by management companies of undertakings for collective investment in transferable securities (UCITS) (Text with EEA relevance)  
 
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Each  undertaking  for  collective  investment  in  transferable  securities  (UCITS)  must  provide 
‘key  investor  information’  in  accordance  with  Directive 2009/65/EC1.  The  information  on 
objectives and investment policy, risk and reward profile, charges, past performance and other 
practical details helps investors to understand the essential characteristics of the UCITS and to 
make  informed  investment  decisions.  Articles 78  to  82,  and  94  of  the  Directive  specify  the 
main principles of the key investor information. Commission Regulation (EU) No 583/20102 
lays down further rules on its content and format. 

UCITS  qualify  as  packaged  retail  and  insurance-based  investment  products  (PRIIPs)  within 
the  meaning  of  Regulation  (EU)  No 1286/20143,  which  requires  that  all  PRIIPs  be 
accompanied  by  a  ‘key  information  document’.  The  document  contains  information  on  the 
PRIIP’s risk and reward profile, including the possible maximum loss of invested capital and 
appropriate performance scenarios, the costs retail investors have to bear when investing in it, 
and  other  details.  Again,  this  information  helps  retail  investors  to  understand  the  essential 
characteristics  of  the  product  and  to  make  informed  investment  decisions.  Commission 
Delegated Regulation  (EU) 2017/6534 lays down  detailed rules  on the presentation,  content, 
review, revision and provision of the document. Delegated Regulation (EU) 2016/19045 lays 
down rules on product intervention. 

Article 32 of Regulation (EU) No 1286/2014 provides for a transitional arrangement whereby 
management companies, investment  companies and persons advising on,  or selling, units of 
UCITS  and  non-UCITS  are  temporarily  exempted  from  the  requirement  to  provide  retail 
investors  with  a  key  information  document.  The  arrangement  currently  applies  until 
31 December 2021. 

This  Directive is  accompanied by two further measures. First, the Commission is  proposing 
that  the  transitional  arrangement  in  Regulation  (EU)  No 1286/2014  be  extended  to 
30 June 2022.  This  will  allow  the  time  necessary  to  prepare  for  the  end  of  the  transitional 
arrangement and to implement the other measure (which involves amendments to Delegated 

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Directive  2009/65/EC  of  the  European  Parliament  and  of  the  Council  of  13  July  2009  on  the 
coordination  of  laws,  regulations  and  administrative  provisions  relating  to  undertakings  for  collective 
investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32). 
Commission Regulation (EU) No 583/2010 of 1 July 2010 implementing Directive 2009/65/EC of the 
European Parliament and of the Council as regards key investor information and conditions to be met 
when providing key investor information or the prospectus in a durable medium other than paper or by 
means of a website (OJ L 176, 10.7.2010, p. 1). 
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) 
(OJ L 352, 9.12.2014, p. 1.). 
Commission  Delegated  Regulation  (EU)  2017/653  of  8  March  2017  supplementing  Regulation  (EU) 
No 1286/2014  of  the  European  Parliament  and  of  the  Council  on  key  information  documents  for 
packaged retail and insurance-based investment products (PRIIPs) by laying down regulatory technical 
standards  with  regard  to  the  presentation,  content,  review  and  revision  of  key  information  documents 
and the conditions for fulfilling the requirement to provide such documents (OJ L 100, 12.4.2017, p. 1). 
Commission  Delegated  Regulation  (EU)  2016/1904  of  14  July  2016  supplementing  Regulation  (EU) 
No 1286/2014  of  the  European  Parliament  and  of  the  Council  with  regard  to  product  intervention 
(OJ L 295, 29.10.2016, p. 11). 

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Regulation (EU) 2017/653) from 1 July 2022. The three measures are therefore synchronised 
in terms of application dates. 

As  things  stand,  as  of  1 July 2022  retail  investors  in  UCITS  would  receive  both  a  key 
information  document  in  accordance  with  Regulation  (EU)  No 1286/2014  and  key  investor 
information  in  accordance  with  Directive 2009/65/EC.  It  is  desirable  to  avoid  a  situation 
where retail investors receive two different pre-contractual disclosure documents in respect of 
the same UCITS. This Directive ensures that a key information document drawn up, provided, 
revised and translated for a given UCITS in accordance with the Regulation is considered as 
satisfying the key investor information requirements of Directive 2009/65/EC. 

This initiative is not part of the regulatory fitness programme (REFIT). 

Consistency with existing policy provisions in the policy area 

Delegated  Regulation  (EU)  2017/653  specifies  the  presentation  and  content  of  the  key 
information  document  for  PRIIPs,  its  standardised  format,  the  methodology  for  presenting 
risk and reward and calculating costs, the conditions and minimum frequency for reviewing 
the information and conditions on providing the document to retail investors. The European 
Banking  Authority  (EBA), the European Securities and Markets  Authority (ESMA) and the 
European  Insurance  and  Occupational  Pensions  Authority  (EIOPA)  jointly  submitted  draft 
amendments  to  the  regulatory  technical  standards  in  the  Regulation,  including  technical 
adjustments to facilitate the application of the rules to UCITS. 

This  proposal  seeks  to  ensure  that  key  information  documents  that  comply  with  Regulation 
(EU) No 1286/2014 are considered as satisfying the requirements for key investor information 
for UCITS in Articles 78 to 82, and 94 of Directive 2009/65/EC. 

Consistency with other Union policies 

The Commission’s top priority is to strengthen the EU economy and stimulate investment so 
as to create jobs in all 27 Member States, by creating a deeper single market for capital — or 
capital  markets  union  (CMU).  Better  retail  investor  legislation  can  be  expected  to  bring 
benefits in other policy areas where business-to-consumer transactions play an important role. 

This  proposal  aims  to  avoid  a  situation  where  two  different  pre-contractual  disclosure 
documents  are  made  available  to  retail  investors  in  respect  of  the  same  UCITS.  The  key 
information document will enable retail investors to compare the essential economic and legal 
characteristics  of  UCITS  with  those  of  other  PRIIPs.  As  regards  pre-contractual  disclosure, 
manufacturers and persons advising on, or selling, UCITS will only have to comply with legal 
obligations  under  Regulation  (EU)  No 1286/2014.  This  proposal  contributes  to  the 
development of more integrated capital markets by making it easier for retail investors, fund 
managers and, in consequence, invested companies to benefit from the single market. 

2. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

This  proposal  is  based  on  Article 53(1)  of  the  Treaty  on  the  Functioning  of  the  European 
Union, which is the legal basis for Directive 2009/65/EC. 

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Subsidiarity (for non-exclusive competence) 

This proposal complies with the principle of subsidiarity, as set out in Article 5 of the Treaty 
on European Union (TEU). According to that principle, Union action may be taken only if the 
envisaged aims cannot be achieved by Member States acting alone. 

Union  intervention  is  needed  to  remove  barriers  to  the  internal  market  in  financial  services 
and  products  by  introducing  a  uniform  approach  to  disclosures  relating  to  PRIIPs.  The 
identified problem (two different pre-contractual disclosure documents for the same UCITS) 
can be resolved only at Union level, since any amendment to Directive 2009/65/EC must be 
made through a Commission proposal. 

Proportionality 

This proposal complies with the principle of proportionality, as set out in Article 5 TEU. The 
proposed  measures  are  necessary  to  reduce  the  consequences  of  a  parallel  application  of 
Directive 2009/65/EC and Regulation (EU) No 1286/2014.  

This  Union  action  is  necessary  to  ensure  the  effective  application  of  the  PRIIPs  rules  by 
competent  authorities  and  PRIIPs  manufacturers,  and  the  smooth  operation  of  the  internal 
market  for investment  funds.  The proposal  will reduce the compliance burden and  costs for 
UCITS by removing duplication on pre-contractual disclosure, burdensome requirements, and 
unnecessary regulatory complexity and legal uncertainty. 

Choice of instrument 

The objective is to eliminate barriers by amending a Directive. Therefore, a Directive is the 
most appropriate instrument. 

3. 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EVALUATIONS, 

EX POST 

OF 

STAKEHOLDER 

Ex post evaluations/fitness checks of existing legislation 

This proposal is not accompanied by a separate impact assessment, as an impact assessment 
has  already  been  produced  for  Regulation  (EU)  No 1286/2014,  also  covering  UCITS.  The 
proposal does not create new obligations for financial market participants. 

The  proposal  promotes  rights  enshrined  in  the  Charter  of  Fundamental  Rights.  The  main 
objective is to strengthen consumer rights (Article 38 of the Charter) and facilitate the right to 
provide services in any Member State (Article 15(2) of the Charter). 

4. 

BUDGETARY IMPLICATIONS 

The proposal does not have a budgetary impact for the Commission. 

5. 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The Commission’s review of Regulation (EU) No 1286/2014, as part of the upcoming Retail 
investment  strategy,  will consider among other the application of the rules laid down in  the 
Regulation.  It  will  be  informed  by  a  public  consultation  and  discussions  with  the  EBA,  the 
ESMA, the EIOPA and the competent authorities of Member States. 

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• 

Detailed explanation of the specific provisions of the proposal 

This proposal inserts a new Article 82a in Directive 2009/65/EC. The Article lays down in a 
clear, precise and unconditional manner that, where a key information document is drawn up, 
provided, revised and translated for a UCITS pursuant to Regulation (EU) No 1286/2014, it 
should be considered as satisfying the requirements applicable to key investor information for 
the purposes of that Directive. 

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2021/0219 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Directive 2009/65/EC as regards the use of key information documents by 
management companies of undertakings for collective investment in transferable 
securities (UCITS) 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 53(1) thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee6, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

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information  about 

Article 78  of  Directive  2009/65/EC  of  the  European  Parliament  and  of  the  Council7 
requires  investment  companies  and  management  companies  to  draw  up  a  short 
document  containing  key 
the  essential  characteristics  of 
undertakings  for  collective  investment  in  transferable  securities  (UCITS)  offered  to 
investors (‘key investor information document’ or ‘KIID’), so that those investors are 
reasonably  able  to  understand  the  nature  and  the  risks  of  the  UCITS  concerned  and, 
consequently, to take investment decisions on an informed basis. 
Regulation  (EU)  No  1286/2014  of  the  European  Parliament  and  of  the  Council8 
requires  manufacturers  of  packaged  retail  and  insurance-based  investment  products 
(PRIIPs), before making such products available to retail investors, to draw up a key 
information  document  for  that  product  in  order  to  enable  such  retail  investors  to 
understand  and  compare  the  key  features  and  risks  of  the  PRIIP  concerned  (‘key 
information document’ or ‘KID’). 

UCITS  also  qualify as  PRIIPs, for which a ‘KID’ is  required pursuant  to  Regulation 
(EU) No 1286/2014. Article 32(1) of that Regulation, however, exempts management 
companies  as  defined  in  Article 2(1)(b)  of  Directive  2009/65/EC,  investment 
companies as referred to in Article 27 thereof and persons advising on, or selling, units 

OJ C […], […], p. […]. 
Directive  2009/65/EC  of  the  European  Parliament  and  of  the  Council  of  13  July  2009  on  the 
coordination  of  laws,  regulations  and  administrative  provisions  relating  to  undertakings  for  collective 
investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32). 
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) 
(OJ L 352, 9.12.2014, p. 1). 

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(4) 

(5) 

of UCITS from the obligations laid down in that Regulation, and thus from producing 
a ‘KID’, until 31 December 2021 (‘transitional arrangement’). 
Commission  Delegated  Regulation  (EU)  2017/6539  supplements  Regulation  (EU) 
No 1286/2014  by  laying  down  regulatory  technical  standards  with  regard  to  the 
presentation,  content  and  standard  format  of  the  KID,  the  methodology  for  the 
presentation of risk and reward and the calculation of costs, as well as the conditions 
and minimum frequency for reviewing the information contained in the KID and the 
conditions on providing the KID to retail investors. 

On  [OJ  Please  insert  the  date],  the  Commission  adopted  Commission  Delegated 
Regulation  (EU)  …/202110,  amending  Delegated  Regulation  (EU)  2017/653,  inter 
alia, to make it easier for management companies, investment companies, and persons 
advising on, or selling,  units of UCITS  to  make use of the presentation, content and 
standard  format  of  the  KID.  The  date  of  application  of  Delegated  Regulation  (EU) 
…/2021, however, has been set on 1 July 2022 to give those management companies, 
investment companies, and persons advising on, or selling, units of UCITS, sufficient 
time to prepare for the end of the transitional arrangement and thus for the obligation 
to  produce  a  KID.  Because  the  date  of  application  of  Delegated  Regulation  (EU) 
…/2021 has been set on 1 July 2022, and because it is necessary to ensure that the end 
of  the  transitional  arrangement  coincides  with  the  date  of  application  of  Delegated 
Regulation  (EU)  …/2021,  Regulation  (EU)  No 1286/2014  has  been  amended  by 
Regulation (EU) ....../2021 of the European Parliament of the Council11 to extend the 
transitional arrangement until 30 June 2022.  

(6) 

The ‘key investor information’ required by Article 78 of Directive 2009/65/EC and the 
‘key  information  documents’  required  by  Regulation  (EU)  No 1286/2014  cover 
essentially the same information requirements.  It is  therefore necessary to avoid  that 
retail investors in PRIIPs interested in acquiring units of UCITS would receive, as of 1 
July 2022, both documents for the same financial product. It should therefore be laid 
down that the KID is to be considered as satisfying the requirements applicable to the 
key investor information document required by Directive 2009/65/EC. 

(7) 

Directive 2009/65/EC should therefore be amended accordingly, 

  HAVE ADOPTED THIS DIRECTIVE: 

In Directive 2009/65/EC, the following Article 82a is inserted: 

“Article 82a 

Article 1 

Key investor information provided through key information document 

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Commission Delegated Regulation (EU) 2017/653 of 8 March 2017 supplementing Regulation (EU) No 
1286/2014 of the European Parliament and of the Council on key information documents for packaged 
retail and insurance-based investment products (PRIIPs) by laying down regulatory technical standards 
with  regard  to  the  presentation,  content,  review  and  revision  of  key  information  documents  and  the 
conditions for fulfilling the requirement to provide such documents (OJ L 100, 12.4.2017, p. 1). 
OJ C […], […], p. […]. 
Regulation  (EU)  ..../2021  of  the  European  Parliament  of  the  Council  as  regard  the  extension  of  the 
transitional  arrangement  for  management  companies,  investment  companies  and  persons  on  advising 
on,  or  selling,  units  of  undertakings  for  collective  investment  in  transferable  securities  (UCITS)  and 
non-UCITS (OJ L .........., dd/mm/jj, p. .....). 

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Member States shall ensure that where an investment company or, for any of the 
common  funds  it  manages,  a  management  company  draws  up,  provides,  revises 
and translates a key information document which complies with the requirements 
for  key  information  documents  laid  down  in  Regulation  (EU)  No  1286/2014  of 
the European Parliament and of the Council*, competent authorities consider that 
key  information  document  as  satisfying  the  requirements  applicable  to  key 
investor  information  as  set  out  in  Articles  78  to  82  and  Article 94  of  this 
Directive. 

_____________________ 

* 

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) (OJ L 352, 9.12.2014, p. 1).”. 

Article 2 

1. 

By 30 June 2022, Member States shall adopt and publish the measures necessary to 
comply with this Directive. They shall immediately inform the Commission thereof. 

They shall apply those measures from 1 July 2022. 

When  Member  States  adopt  those  measures,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication.  The  methods  of  making  such  reference  shall  be  laid  down  by  the 
Member States. 

2. 

As soon as this Directive has entered into force, Member States shall ensure that the 
Commission is informed, in sufficient time for it to submit its comments, of any draft 
laws, regulations or administrative provisions which they intend to adopt in the field 
covered by this Directive. 

This Directive shall enter into force on the day following that of its publication in the Official 
Journal of the European Union. 

Article 3 

This Directive is addressed to the Member States. 

Done at Brussels, 

Article 4 

For the European Parliament 
The President 

For the Council 
The President 

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