Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1286/2014 as regards the modernisation of the key information document
Date: 2023-05-24
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: capital markets union, consumer information, disclosure of information, electronic document, financial legislation, investment, investment transaction

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   EUROPEAN COMMISSION  Brussels, 24.5.2023  COM(2023) 278 final 2023/0166 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) No 1286/2014 as regards the modernisation of the key information document   (Text with EEA relevance) {SWD(2023) 278-279 final} - {SEC(2023) 330 final}  
 
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

In  line  with  the  Commission’s  objective  of  ‘an  economy  that  works  for  people’,  and  as 
announced in the 2023 work programme, the Commission is seeking to ensure that the legal 
framework for retail investments sufficiently empowers consumers, encourages improved and 
fairer  market  outcomes,  and  ultimately  creates  the  necessary  conditions  to  grow  retail 
investors’ participation in capital markets.   
In its September 2020 new Capital Markets Union Markets Union action plan1, the European 
Commission announced its intention to put forward a strategy for retail investments in Europe 
aimed  at  ensuring  that  retail  investors  can  take  full  advantage  of  capital  markets  and  are 
supported by  rules that are coherent across all relevant legal instruments.   

A core objective of the Capital Markets Union (CMU) is to ensure that consumers can fully 
benefit  from  the  investment  opportunities  offered  by  capital  markets.  While  retail 
participation  in  the  capital  markets  varies  widely  across  Member  States,  reflecting  different 
historical  and  socio-economic  conditions,  retail  investors  should  be  able  to  achieve  better 
investment outcomes than is currently the case when participating in EU capital markets.    

This goal is shared by the co-legislators:  
On 3 December 2020, in the Council Conclusions on the Commission’s CMU Action Plan2, 
the  Council  called  on  the  Commission  to  initiate  implementation  of  the  parts  of  the  action 
plan that aim to boost investment activity, particularly by retail investors inside the EU, while 
ensuring a high level of consumer and investor protection.   

On  8  October  2020,  the  European  Parliament  adopted  a  Resolution  on  the  further 
development  of  the  Capital  Markets  Union3  that  was  largely  supportive  of  measures  to 
increase  retail  investor  participation  in  capital  markets.  The  Resolution  emphasised  that 
increased  retail  investor  participation  is  contingent  on  a  change  in  investment  culture,  and 
such  a  change  could  only  come  into  effect  when  retail  investors  become  convinced  that 
investing in capital markets is desirable while being subject to acceptable and clearly defined 
risks.  

This proposal amends 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’).  The  entry  into  force  of  the  PRIIPs 
Regulation and the Commission Delegated Regulation (EU) 2017/653 on 1 January 2018 has 
helped improve and standardise the information provided to retail investors. This has made it 
easier for investors to understand key features of a full range of investment products  and to 
compare different products including those of different product type (such as insurance-based 
investment  products,  investment  funds  or  structured  deposits).  As  of  January  2023,  PRIIPs 
started to apply to investment funds under the scope of Directive 2009/65/EC on undertakings 
for  collective  investment  in  transferable  securities  (the  UCITS  directive),  as  the  previous 

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2 
3 

https://ec.europa.eu/info/business-economy-euro/growth-and-investment/capital-markets-union/capital-
markets-union-2020-action-plan_en. 
https://data.consilium.europa.eu/doc/document/ST-12898-2020-REV-1/en/pdf.  
https://www.europarl.europa.eu/doceo/document/TA-9-2020-0266_EN.html.  

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exemption  had  ceased  to  apply.  This  has  further  increased  the  consistency  of  disclosures 
across retail investment products.  

This proposal for targeted amendments to the PRIIPs legal framework is included in the EU 
Retail  investment  strategy,  in  line  with  Action  8  of  the  September  2020  CMU  action  plan. 
Regarding  disclosures,  the  EU  retail  investment  strategy  aims  to  improve  information  for 
investors  and  their  ability  to  take  well-informed  investment  decisions.  To  that  end,  this 
proposal  aims  to  adapt  disclosures  to  the  digital  environment  and  to  the  evolving  needs  of 
retail investors, and to provide further clarity on the scope of PRIIPs with regards to corporate 
bonds  with  make-whole  clauses  and  immediate  annuities.  This  initiative  is  not  part  of  the 
Regulatory Fitness programme (REFIT).  

• 

Consistency with existing policy provisions in the policy area 

This initiative builds upon, and improves, existing rules that govern the provision of PRIIPs 
key  information  documents  (PRIIPs  KIDs)  to  retail  investors  by  manufacturers  and 
distributors of investment  products.  It  involves  targeted changes to  this framework, keeping 
the main provisions intact.  

This  proposal  forms  a  package  strengthening  retail  investor  protection  with  the  Omnibus 
directive  (COM(2023)  279),  where  both  proposals  mutually  reinforce  each  other.  The 
Omnibus  directive  amends  the  EU  directives  governing:  i)  the  provision  of  investment 
services (‘MiFID’4); ii) the provision of insurance or reinsurance distribution services to third 
parties (‘IDD’5); iii) the take-up and pursuit of insurance business within the EU (‘Solvency 
II’6);  iv)  the  coordination  of  laws,  regulations  and  administrative  provisions  relating  to 
undertakings  for  collective  investment  in  transferable  securities  (‘UCITS’7);  and  v) 
Alternative Investment Fund Managers (‘AIFMD’8).  

With  regards  to  disclosures  for  retail  investors,  the  Omnibus  directive  will  notably  improve 
the coherence of disclosures across legal instruments and promote more transparency to retail 
investors  across  their  investment  journey  and  the  investment  life  cycle,  including  on  costs. 
Targeted  amendments  in  the  MiFID  II  and  IDD  frameworks  would  ensure  that  costs  of 
investment products are presented in a standardised and easy-to-understand format, before the 
execution  of  any  transaction.  These  measures  would  also  reinforce  firms’  obligations  to 
provide an annual statement to clients, informing them ex-post  on costs actually paid but also 
on the performance of their portfolio.  

The  measures  on  product  disclosure  proposed  in  this  Regulation  also  complement  other 
measures in the Omnibus directive, which tackle shortcomings in different parts of the retail 
investor journey: 

Directive  2014/65/EU  of  the  European  Parliament  and  of  the  Council  of  15  May  2014 on  markets  in 

Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance 

Directive  2009/138/EC  of  the  European  Parliament  and  of  the  Council  of  25  November  2009  on  the 

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financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU 
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distribution (recast) 
6 
taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (recast) 
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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) (recast) 
8 
Directive  2011/61/EU  of  the  European  Parliament  and  of  the  Council  of  8  June  2011  on  Alternative 
Investment  Fund  Managers  and  amending  Directives  2003/41/EC  and  2009/65/EC  and  Regulations  (EC)  No 
1060/2009 and (EU) No 1095/2010 

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 

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 

New  rules  aimed  at  protecting  retail  investors  from  misleading  marketing 
communications and practices which emphasise benefits but downplay the potential 
risks; 

Rules  prohibiting  inducements  in  execution-only  cases  and  tackling  bias  in  the 
advice  process  by  strengthening  the  best  interest  principle  and  introducing  new 
criteria  for  “acting  in  the  best  interest  of  the  client”  as  well  as  improving 
transparency;  

Measures  amending  product  oversight  and  governance  rules  to  ensure  that  undue 
costs are not charged, and products deliver value for money to retail investors; 

and  further  measures  on  financial  literacy,  investor  categorisation,  enhanced 
suitability  and  appropriateness  assessments,  measures  to  increase  professional 
to  enhance  supervisory 
qualifications  of  financial  advisors  and  measures 
enforcement.  

 Measures  included  in  the  retail  investment  strategy  are  hence  consistent  with  the  targeted 
changes to PRIIPs KIDs.  

This proposal is consistent with existing EU policies on sustainable finance. The introduction 
of a new dedicated section in the PRIIPs key investment document focused on sustainability 
complements the sustainable finance disclosure framework. It builds on data already disclosed 
under  the  Sustainable  Finance  Disclosure  Regulation  (EU)  2019/2088  (SFDR)  and  the 
Taxonomy Regulation (EU) 2020/852 in order to avoid duplications and unnecessary costs for 
the financial sector.  The PRIIPs  framework will be kept  consistent  with  the potential future 
changes to SFDR and EU Taxonomy. To allow this, this proposal leaves specifications for the 
calculation and presentation of the selected indicators for regulatory technical standards to be 
developed by the ESAs. This is important notably as the Commission services have launched 
a comprehensive assessment of the implementation of SFDR.  

The proposed targeted changes are considered coherent and complementary with the inclusion 
of  the  PRIIPs  KIDs  in  the  scope  of  the  Regulation  on  a  European  Single  Access  Point 
(ESAP).  Pending  the  outcome  of  the  negotiations  on  the  Commission’s  proposal9,  ESAP 
would make the content of the PRIIPs KIDs available on a single platform and would require 
that they are provided in a data-extractable format starting from end 2027. Depending on the 
implementing measures adopted through implementing acts, this could make such information 
machine  readable.  While  ESAP  will  improve  access  to,  and  the  digital  use  of,  information 
contained in PRIIPs KIDs by requiring that they are submitted to ESAP in a data extractable 
format,  targeted  changes  proposed  now  would  make  this  information  more  reader-friendly. 
ESAP  is  expected  to  benefit  retail  investors  mainly  by  increasing  access  to  online  tools  for 
comparing  many  different  investment  products  (by  making  it  easier  for  third  parties  to 
develop  such  tools).  Retail  investors  and  their  advisors  however  will  still  need  to  read  the 
content  of  the  KID,  whether  on  paper,  or  in  electronic  format,  notably  when  assessing  the 
characteristics  of  a  specific  investment  product.  Therefore,  in  parallel  to  making  this 
information available on ESAP, it is relevant to make the document more user-friendly. The 
changes  introduced in  this Regulation  also  aim to  achieve  greater consistency  on the digital 
presentation  of  key  information  on  investment  products,  following  the  example  of  a  similar 
document  introduced  under  the  Regulation  (EU)  2019/1238  on  a  pan-European  personal 
pension product (PEPP).  

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Proposal COM/2021/723 final, available at: EUR-Lex - 52021PC0723 - EN - EUR-Lex (europa.eu). 

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• 

Consistency with other Union policies 

This proposal is consistent with broader EU strategies and priorities including the European 
Green  Deal,  the  EU’s  digital  strategy  and  the  Capital  Markets  Union.  It  contributes  to  the 
objectives  of  the  Capital  Markets  Union  by  increasing  the  consistency  of  information 
available  to  retail  investors.  By  making  relevant  sustainability  information  more  visible,  it 
will help retail investors to find investment products matching their sustainability preferences. 
This would in turn contribute to mainstreaming sustainability in the financial sector and thus 
help achieve the objectives of the European Green Deal. Moreover, this proposal is consistent 
with the Commission’s priority of making Europe Fit for the Digital Age.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The  legal  basis  for  the  PRIIPs  Regulation  is  Article  114  of  the  TFEU,  as  it  establishes 
common  rules  on  key  information  documents  for  packaged  retail  and  insurance-based 
investment products. Considering that the current initiative proposes further policy actions to 
ensure the achievement of these objectives, the related legislative proposal would be adopted 
under the same legal basis.  

• 

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  this  principle,  action  should  only  be  taken  at  EU 
level if the aims cannot be achieved by Member States acting alone. To avoid barriers to the 
distribution of investment funds across the EU, product information needs to be harmonised 
to  enable  comparison  between  products  originating  from  different  markets.  Uniformity  and 
legal certainty can be better ensured by  acting at EU level. This applies to both the existing 
PRIIPs Regulation itself and to its amendments proposed here.  

• 

Proportionality 

This proposal complies with the principle of proportionality as set out in Article 5 TEU. The 
proposed  measures  are  necessary  to  achieve  the  objectives  of  transparency  of  investment 
products for retail investors, notably on their sustainability characteristics, and making related 
disclosures  more  accessible 
introducing  unnecessary 
administrative burdens. Other parts of this proposal are necessary to provide sufficient legal 
clarity  and  transparency  on  costs  for  certain  products  within  the  scope  of  the  PRIIPs 
Regulation.  The  proportionality  of  the  measures  was  assessed  in  Section  3  of  the  impact 
assessment report  accompanying the retail investment strategy with the conclusion that they 
are proportionate.  

through  digital  means  without 

• 

Choice of the instrument 

As  the  existing  legal  instrument  is  a  regulation,  a  regulation  is  needed  to  amend  it.  A 
regulation  continues  to  be  the  most  appropriate  legal  instrument,  considering  the  need  to 
ensure the consistency and coherence of information available to retail investors at EU level.  

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3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

The  annex  to  the  accompanying  impact  assessment  contains  an  evaluation  of  the  aspects  of 
the  legislative  framework  specifically  relating  to  protection  of  retail  investors  including  the 
PRIIPs framework.  

The evaluation concluded that the overall disclosure framework, including PRIIPs, has been 
broadly effective, notably in providing information to retail investors that is comparable and 
useful for their decision-making. Nevertheless, some shortcomings were identified in terms of 
the  readability  and  user-friendliness  of  the  presentation  of  information  documents. 
Information on costs is  also not always clear. The efficiency (cost-effectiveness) of existing 
disclosure  requirements  is  high,  having  broadly  achieved  the  objective  of  increasing  retail 
investor protection at limited costs. This proposal provides greater legal clarity on the scope 
of PRIIPs, addressing the challenges identified in the evaluation (i.e. whether corporate bonds 
with  make-whole  clauses  and  immediate  annuities  are  included  in  the  scope  of  PRIIPs). 
Requirements  on 
language  use  and 
comprehensive coverage are considered coherent between the different pieces of legislations. 
Some specific issues are addressed in the proposed Omnibus Directive  which aims to better 
align  MiFID  and  IDD  rules  with  PRIIPs.  The  relevance  of  information  provided  to  retail 
investors in PRIIPs key information documents could be improved, in particular considering 
the need to place greater emphasis on the digital environment and sustainability. 

readability,  clarity,  conciseness, 

format, 

the 

• 

Stakeholder consultations 

To  help  prepare  this  proposal,  the  Commission  gathered  feedback  by  means  of  a  public 
consultation  which  took  place  between  11 May 2021  and  3 August 2021.  The  consultation 
sought  the  views  of  a  broad  range  of  stakeholders  on  various  aspects  of  retail  investments, 
including on the functioning of and possible improvements to the PRIIPs KID. In total, 186 
respondents replied to this consultation.  

A  majority  of  respondents  agreed  that  pre-contractual  disclosures  should  enable  as  far  as 
possible  a  clear  comparison  between  different  investment  products.  Views  were  split  on 
whether  the  PRIIPs  KID  has  improved  retail  investors’  level  of  understanding  of  retail 
investment  products  and  their  ability  to  compare  different  retail  investment  products,  both 
within and across different product types. 

Almost half of the respondents considered that amount of information provided in the PRIIPs 
KID  to  be  adequate,  with  others  indicating  that  it  was  either  too  much  or  too  little.  Views 
differed by type of information  and stakeholder,  but  sustainability-related information  stood 
out  as  an  area  where  more  information  was  desirable.  Regarding  the  length  of  the  PRIIPs 
KID,  there  was  overall  support  for  the  current  maximum  length  of  three  pages,  with  some 
variation  between  stakeholder  groups.  There was a  broad  agreement that  the PRIIPs KID is 
somewhat overloaded with information and most respondents were in favour of simplifying it. 
A strong majority was against more frequent updates of PRIIPs KIDs. Finally, almost half of 
respondents considered that retail investors could easily find and access PRIIPs KIDs.  

• 

Collection and use of expertise 

The  recommendations  of  the  Joint  Committee  of  the  European  Supervisory  Authorities 
(ESAs)  on  PRIIPs  focused  on  making  KIDs  more  consumer  friendly.  The  ESAs 

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recommended  targeted  changes  to  the  PRIIPs  Regulation  as  part  of  a  review  of  the  PRIIPs 
framework.  

In particular, the Joint Committee recommended: i) improving the presentation of the KID on 
digital media and providing more flexibility on their digital presentation; ii) Allowing a more 
visible presentation of environmental, social and governance (‘ESG’) information in the KID 
through a separate section; iii) providing more specific cost information for insurance multi-
option  products;  iv)  incorporating  more  flexibility  into  the  KID,  including  by  allowing 
different  types of performance information depending on the product  type;  v) making KIDs 
more tailored to specific product types; and vi) clarifying and tweaking the product scope of 
the PRIIPs Regulation by making it clear that certain corporate bonds are excluded. 

Annex  2  of  the  accompanying  impact  assessment  lists  additional  sources  considered  when 
preparing  this  proposal,  including  targeted  stakeholder  consultations  and  outreach.  The 
Commission  also  relied  on  extensive  research  literature,  which  is  referenced  in  the  impact 
assessment,  in  particular  a  specially  commissioned  study  carried  out  by  a  consortium  of 
consultants  led  by  Kantar,  titled  ‘Disclosure,  inducements,  and  suitability  rules  for  retail 
investors study’, published in 202210. 

At an earlier stage, the preparation of this proposal also benefited from the advice of the CMU 
High-level forum (‘CMU HLF’), which recommended revisiting disclosures under the PRIIPs 
framework at an appropriate time. Input was also provided by the Government Expert Group 
on Retail Financial Services (GEGRFS) and the Financial Services User Group (FUSG)11. 

• 

Impact assessment 

This proposal has been informed by the Impact  assessment on the retail investment strategy 
(SWD(2023)  278-279).  The  Impact  Assessment  was  submitted  to  the  Regulatory  Scrutiny 
Board  (‘RSB’)  on  14  December  2022  and  received  a  positive  opinion  on  20  January  2023 
(SEC(2023) 330 RSB). It was subsequently amended to reflect the consultation with the RSB. 

influenced  by  marketing  communications.  Second, 

Two  problems  are  explored  in  the  Impact  Assessment.  First,  retail  investors  lack  relevant, 
comparable  and  easily  understandable  information  on  investment  products  and  are  often 
inappropriately 
there  are  major 
shortcomings in the investment product manufacturing and distribution process related to the 
payment  of inducements and the extent to  which product  design reflects  cost-efficiency and 
value  for  the  retail  investor.  These  problems  have  significant  consequences,  including 
insufficient  protection  and  unfair  treatment  of  investors,  reduced  investment  returns  and 
ability to  accumulate capital  and  negative effects  on  retail  investors’ confidence and market 
integration. 

Targeted changes to the PRIIPs KID form a part of the proposed solutions to address the first 
problem and its driver (‘the information provided to investors is not always useful or relevant 
for  their  decision-making  process  and  it  is  not  sufficiently  adapted  for  the  digital 

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11 

https://op.europa.eu/en/publication-detail/-/publication/d83364e5-ab55-11ed-b508-
01aa75ed71a1/language-en/ 
The FSUG gathers experts representing the interests of consumers, retail investors or micro-enterprises. 
It provides  advice to the Commission  for the preparation and implementation of legislation or policy 
initiatives 
information: 
https://finance.ec.europa.eu/regulation-and-supervision/expert-groups-comitology-and-other-
committees/financial-services-user-group-fsug_en. 

affecting 

financial 

services. 

more 

users 

For 

of 

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environment’). These are included under Option 2 - ‘Targeted changes to disclosure rules to 
improve their relevance for retail investors’, together with targeted amendments to disclosure 
rules  under  MiFID  and  IDD  focused  on  improving  the  relevance  of  disclosures  for  retail 
investors  (included  in  the  accompanying  Omnibus  Directive).  An  additional  further  policy 
option  was  considered  under  Option  3  -  ‘Targeted  changes  to  address  informational 
deficiencies relating to marketing communications’. Options 2 and 3 are complementary and 
constitute an improvement compared to the status quo at a reasonable cost. A combination of 
both was therefore both included in the preferred option. 

The impact assessment concludes that improving the presentation of the PRIIPs KID through 
the  use  of  layering  and  the  development  of  a  summary  dashboard  would  make  it  easier  for 
retail  investors  to  understand  key  characteristics  of  the  investment  product  they  are 
considering (e.g. its costs  and risk level)  and help them choose a product that matches their 
needs.  The  introduction  of  a  new  sustainability  section  would  ensure  that  retail  clients  can 
clearly identify  and  easily  compare basic information on the sustainability characteristics of 
the products they  consider buying.  

• 

Regulatory fitness and simplification 

While  the  potential  for  simplification  and  burden  reduction  has  been  considered  in  the 
preparation  of  this  proposal,  its  primary  objective  as  well  as  that  of  the  wider  Retail 
investment strategy is consumer protection. Any simplification or burden reduction measures 
therefore needs to be considered from the perspective of this objective. The evaluation has not 
identified  significant  scope  for  simplification  and  burden  reduction  and  suggested  that 
simplification of PRIIPs key information documents would not necessarily make investment 
products  more understandable. Moreover, the overall costs of product  disclosures in  PRIIPs 
were identified to be relatively low, especially when compared to the large number of clients 
and scale of assets under management.  No significant impact is expected for SMEs and the 
proposal  is  consistent  with  the  “digital  check”  as  it  encourages  greater  use  of  PRIIPs  in 
electronic format.  

• 

Fundamental rights 

The  proposal  observes  and  respects  the  principles  set  out  in  the  Charter  of  Fundamental 
Rights  of  the  European  Union,  in  particular  the  principle  on  a  high  level  of  consumer 
protection  for  all  EU  citizens  (Article  38).  Consumers,  in  this  case  retail  investors,  need 
relevant,  comparable  and  easily  understandable  information  about  investment  products  in 
order  to  make  well-informed  decisions.  This  proposal  modernises  PRIIPs  KIDs  in  order  to 
make the presentation of information more user-friendly for retail investors, including people 
with disabilities, thus increasing the likelihood that it is read and correctly understood.  

4. 

BUDGETARY IMPLICATIONS 

The initiative does not have an impact on the EU budget. Supervision of the new rules would 
be handled by the National Competent Authorities under their existing mandates and its scope 
is not changed by this proposal.   

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The  Commission  will  monitor  how  the  proposed  regulation,  once  adopted,  achieves  the 
objectives set out in the Impact  assessment accompanying the  retail investment strategy. To 

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this  end,  it  aims  to  task  the  European  Securities  and  Markets  Authority  (ESMA)  and  the 
European  Insurance  and  Occupational  Pensions  Authority  (EIOPA)  with  monitoring  the 
effectiveness of displaying information in a digital format, of introducing a new sustainability 
section  and  new  rules  for  multi-option  products  (MOPs).  The  Commission  also  plans  to 
monitor trends in the number of complaints submitted through the ESMA and EIOPA market 
monitoring to assess the quality of information available. At an appropriate stage, allowing for 
enough  practical  experience  and  data  to  be  gathered,  including  with  the  application  of  the 
recently amended PRIIPs Delegated Regulation12, the Commission plans to evaluate the role 
of disclosure documents in enabling investors to take well-informed investment decisions and 
could consider potential further amendments to the broader PRIIPs framework.  

• 

Detailed explanation of the specific provisions of the proposal 

Article  1(1)(a)  updates  the  legal  references  to  the  existing  legislation  (now  Regulation 
2017/1129  –  ‘the  Prospectus  Regulation’)  for  the  types  of  securities  that  do  not  have  to 
produce a PRIIPs KID. 

Article 1(1)(b)  excludes retail products providing immediate annuities without a redemption 
phase from the scope of the PRIIPs Regulation. 

Article 1(2) updates references to Regulation 2017/1129 (the Prospectus Regulation) to ensure 
that both regulations apply to relevant products. 

Article 1(3)(a) clarifies that certain types of corporate bonds with make-whole causes are out 
of the scope of the PRIIPs Regulation provided that they are redeemed at a fair value. 

Article 1(3)(b) introduces a definition of electronic format. 

Article  1(4)  amends  the  rules  for  presenting  costs  of  multi-option  products  (‘MOPs’), 
specifying  the  conditions  that  have  to  be  met  in  order  to  provide  transparent  information  to 
retail investors and facilitate choice between different investment options. 

Article  1(5)(a)  introduces  a  new  section  in  the  PRIIPs  KID  titled  ‘Product  at  a  glance’  to 
summarise and highlight the information on an investment product type, its costs and the level 
of riskiness, recommended holding period and presence of insurance benefit.  

Article 1(5)(b) removes the ‘comprehension alert’ as it has not been sufficiently effective in 
warning  retail  investors  against  particularly  complex  products  and  could  have  also 
unintentionally discouraged them from purchasing less complex investment products.   

12 
The  delegated  regulation  amending  PRIIPs  entered  into  force  on  1  January  2023.  It  makes  the 
PRIIPs  KIDs  fully  applicable  to  UCITS  and  introduces  the  following  changes:  i)  new  methodologies  for 
calculating  appropriate  performance  scenarios  and  a  revised  presentation  of  the  scenarios,  to  ensure  that 
retail  investors  are  provided  information  that  would  lead  to  more  appropriate  expectations  on  possible 
returns; ii) revised summary cost indicators and changes to the content and presentation of information on 
the costs of PRIIPs, to allow retail investors to better understand the different types of cost structure and to 
facilitate  the  use  of  this  information  by  individuals  advising  on  or  selling  PRIIPs;  iii)  a  modified 
methodology  for  calculating  transaction  costs,  to  address  practical  challenges  that  have  arisen  when 
applying  the  existing  rules,  and  issues  regarding  their  application  to  certain  types  of  investment;  and  iv) 
provisions  on  past-performance  information  for  certain  types  of  UCITS,  retail  AIFs  and  insurance-based 
is  available  at:  https://eur-lex.europa.eu/legal-
investment  products.  The  consolidated  version 
content/EN/TXT/?uri=CELEX%3A02017R0653-20230101.  

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Article  1(5)(c)  removes  a  reference  to  environmental  and  social  objectives  pursued  by  the 
investment product, which is replaced by a new dedicated sustainability section in the PRIIPs 
key information document. 

Article  1(5)(d)  introduces  a  new  section  in  the  PRIIPs  KIDs  titled  ’How  environmentally 
sustainable  is  this  product?’  (‘sustainability  section)  to  provide  retail  investors  with  a 
harmonised  set  of  key  information  on  the  sustainability  profile  of  relevant  investment 
products, building on existing product disclosures.  

Article 1(5)(e) deletes an empowerment for the Commission to adopt delegated acts following 
the  replacement  of  a  reference  to  environmental  and  social  objectives  by  the  sustainability 
section.  The  new  sustainability  section  would  be  specified  through  Regulatory  Technical 
Standards, for which the empowerment already exists. 

Article  1(5)(f)  amends  the  timing  of  submission  of  applicable  draft  regulatory  technical 
standards to the Commission.  

Article 1(6) adds a condition for the ESAs to consider situations where PRIIPs KIDs are no 
longer  made  available  and  amends  the  timing  of  submission  of  applicable  draft  regulatory 
technical  standards  to  the  Commission.  It  also  delegates  power  to  the  Commission  to  adopt 
related regulatory technical standards.  

Article  1(7)  modernises  and  simplifies  the  provisions  on  making  PRIIPs  KIDs  available.  It 
establishes  a  stronger  preference  for  KIDs  to  be  provided  in  electronic  format,  while 
clarifying  that  the  client  may  request  a  paper  version  of  the  PRIIPS  KID  free  of  charge.  It 
updates  the  provisions  making  PRIIPs  KIDs  available  in  electronic  format,  building  on 
established practices from MiFID and IDD frameworks. It further specifies conditions for the 
use of layering and personalisation to provide greater legal clarity on the possibilities of using 
digital  presentation  of  PRIIPs  KIDs.  It  tasks  the  ESAs  with  the  development  of  draft 
regulatory  technical  standards specifying the conditions  for such presentation as well as the 
functionalities to make information accessible to visually impaired readers. 

Article  2  provides  that  entry  into  force  and  application  should  occur  on  the  twentieth  day 
following that of publication and sets the date of application at 18 months thereafter, in order 
to allow sufficient time for the development of Regulatory Technical Standards.  

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2023/0166 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) No 1286/2014 as regards the modernisation of the key 
information document  

(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 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

A core objective of the Capital Markets Union (CMU) is to ensure that consumers can 
fully benefit from the investment opportunities offered by capital markets. To be able 
to do so, consumers must be supported by a regulatory framework that empowers them 
to  take  investment  decisions  that  correspond  to  their  needs  and  aims  and  adequately 
protects  them  in  the  single  market.  The  package  of  measures  under  the  EU  Retail 
investment strategy seeks to address the identified shortcomings, including those in the 
area of information available to retail investors. 

Article  4,  point  (1),  of  Regulation(EU)  No  1286/2014  defines  packaged  retail 
investment products or ‘PRIPs’ as investments 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 
that are not directly purchased by the retail investor. The ability for the manufacturer 
to redeem the investment early by triggering a make-whole clause should not in itself 
be considered as such a fluctuation. That fact should be reflected in the definition of 
PRIPs.  

In  the  case  PRIIPs  offer  the  retail  investor  a  range  of  options  for  investments,  the 
information  on  those  various  options  may  be  contained  in  different  documents.  That 
makes it difficult for retail investors interested in purchasing such PRIIPs to identify 
the total costs of the PRIIPs.  It is therefore necessary to provide retail investors with 
tools, including simulation tools, to access and compare the total costs of such PRIIPs 
before they select one particular investment option. More detailed rules to use of these 
tools should ensure better visibility of the total costs of these products while allowing 
a certain degree of flexibility when using simulation tools. 

(4) 

Retail  investors  increasingly  seek  information  on  the  sustainability  performance  of 
investment products, including PRIIPs. Recent Union legislative acts have introduced 

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several  disclosure  obligations  that  could  be  leveraged  to  inform  retail  investors,  in 
particular Regulation (EU) 2019/2088 of the European Parliament and of the Council13 
and Regulation (EU) 2020/852 of the European Parliament and of the Council14. Such 
disclosures may, however, not be sufficiently visible to retail investors. It is therefore 
necessary to  add certain  information  about  the sustainability profile of PRIIPs to the 
key information document. To avoid additional reporting costs, that ESG information 
should be taken from the disclosures  provided by product manufacturers pursuant to 
Regulation (EU) 2019/2088 and Regulation (EU) 2020/852.  

Increased  digitalisation  provides  opportunities  to  present  key  features  of  PRIIPs  in  a 
more  attractive  way.  Regulation  (EU)  No  1286/2014  does  not,  however,  provide 
sufficient  flexibility  for  the  use  of  digital  means  for  displaying  key  information  to 
investors such as presenting information from PRIIPs key information documents in a 
layered  way  and  in  a  personalised  manner  that  would  reduce  the  visual  overload  of 
retail investors and facilitate their understanding of the PRIIP concerned. It is therefore 
necessary  to  introduce  more  flexibility  in  the  use  of  the  electronic  format  so  that 
investors  can  fully  benefit  from  the  potential  offered  by  the  provision  of  a  key 
information  document  in  an  electronic  format,  including  by  customising  the  amount 
they  wish  to  invest  or  the  holding  period,  according  to  their  preferences.  That 
personalisation does not imply an assessment by the PRIIPs provider of the individual 
characteristics  of  the  potential  retail  investor.  The  three-page  key  information 
document  should  always  be  drawn  up  in  accordance  with  Article  8  and  available  on 
the  manufacturer's  website.  However,  the  key  information  it  contains  could  be 
provided  to  retail  investors  in  a  flexible  and  personalised  way,  as  long  as  retail 
investors  are  informed  that  they  can  download  the  complete  key  information 
document.  

The European Securities and Markets Authority, the European Banking Authority and 
the  European  Insurance  and  Occupational  Pensions  Authority  (the  ‘ESAs’)  should 
develop  the  draft  regulatory  technical  standards  as  regards  the  content  of  the 
dashboards  and  the  principles  for  the  use  of  layering  and  digital  options  using  an 
electronic  format.  The  Commission  should  adopt  those  draft  regulatory  technical 
standards, or further amend them, by means of delegated acts pursuant to Article 290 
TFEU and in accordance with Articles 10 to 14 of Regulations (EU) No 1093/201015, 
(EU) 1094/201016  and Regulation (EU) 1095/2010 of the European Parliament and of 
the Council17.  

Regulation  (EU)  2019/2088  of  the  European  Parliament  and  of  the  Council  of  27  November  2019  on 
sustainability‐related disclosures in the financial services sector (OJ L 317, 9.12.2019, p. 1). 
Regulation  (EU)  2020/852  of  the  European  Parliament  and  of  the  Council  of  18  June  2020  on  the 
establishment  of  a  framework  to  facilitate  sustainable  investment,  and  amending  Regulation  (EU) 
2019/2088 (OJ L 198, 22.6.2020, p. 13). 
Regulation  (EU)  No  1093/2010  of  the  European  Parliament  and  of  the  Council  of  24  November  2010 
establishing  a  European  Supervisory  Authority  (European  Banking  Authority),  amending  Decision 
No 716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12). 
Regulation  (EU)  No  1094/2010  of  the  European  Parliament  and  of  the  Council  of  24  November  2010 
establishing  a  European  Supervisory  Authority  (European  Insurance  and  Occupational  Pensions 
Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 
331, 15.12.2010, p. 48). 
Regulation  (EU)  No  1095/2010  of  the  European  Parliament  and  of  the  Council  of  24  November  2010 
establishing a European  Supervisory  Authority (European  Securities and Markets  Authority), amending 
Decision  No  716/2009/EC  and  repealing  Commission  Decision  2009/77/EC  (OJ  L  331,  15.12.2010, 
p. 84). 

(5) 

(6) 

13 

14 

15 

16 

17 

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(7) 

(8) 

(9) 

To ensure that retail investors make an informed investment decision at all times, the 
key  information  document  should  be  kept  up  to  date.  Draft  regulatory  technical 
standards  should  specify  the  conditions  under  which  the  key  information  document 
should be revised, distinguishing between PRIIPs that are still made available to retail 
investors and PRIIPs that are no longer made available. Keeping the key information 
document  updated  should  be  without  prejudice  to  the  fact  that  manufacturers  should 
comply  with  the  pre-contractual  information  contained  in  the  key  information 
document provided to retail investors before their investment. 

Regulation (EU) No 1286/2014 should therefore be amended accordingly. 

Sufficient  time  needs  to  be  provided  to  European  Supervisory  Authorities  to  draft 
specifications for key elements of the amended rules and for the PRIIPs manufacturers 
to familiarise themselves with these  specifications. Therefore, the date application  of 
this Regulation should be deferred, 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Amendments to Regulation (EU) 1286/2014 

Regulation (EU) 1286/2014 is amended as follows: 

(1) 

Article 2(2) is amended as follows: 

(a) 

point (d) is replaced by the following:  

‘(d)  securities  as  referred  to  in  Article  1(2),  points  (b)  to  (e),  and  point  (g)  of 
Regulation (EU) 2017/1129 of the European Parliament and the Council*;’; 

(b) 

the following point (h) is added:   

‘(h)  pension  products,  including  immediate  annuities  without  a  redemption  phase, 
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;’;   

* 

Regulation (EU) 2017/1129 of the European Parliament and of the Council of 
14  June  2017  on  the  prospectus  to  be  published  when  securities  are  offered  to  the 
public  or  admitted  to  trading  on  a  regulated  market,  and  repealing  Directive 
2003/71/EC (OJ L 168, 30.6.2017, p. 12).;   

(2) 

in Article 3, paragraph 1 is replaced by the following : 

‘1.  Where  PRIIPs  manufacturers  subject  to  this  Regulation  are  also  subject  to 
Regulation  (EU)  2017/1129,  this  Regulation  and  Regulation  (EU)  2017/1129  shall 
both apply.’; 

(3) 

Article 4 is amended as follows: 

(a) 

 in point (1), the following text is added after the last sentence:  

“,  except  if  those  fluctuations  are  only  attributed  to  the  inclusion  of  a  make  whole 
clause as defined in Article 4(1)(44a) of Directive 2014/65/EU.”  

(b)  The following point (7a) is inserted: 

‘(7a) ‘electronic format’ means any durable medium other than paper;’; 

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(4) 

in Article 6 paragraph 3 is replaced by the following: 

“3. By way of derogation from paragraph 2, where a PRIIP offers the retail investor a 
range  of  options  for  investments,  such  that  all  information  required  in  Article  8(3) 
with  regard  to  each  investment  option  cannot  be  provided  within  a  single,  concise 
stand-alone  document,  the  key  information  document  shall  provide  a  generic 
description  of  the  underlying  investment  options,  and  the  costs  of  the  PRIIP  other 
than the costs for the investment option, provided that: 

(a)  PRIIPs  manufacturers  provide  investors  with  tools  adapted  to  retail  investors 
that facilitate research and comparison among the different investment options, 
including on costs; 

(b)  Retail 

investors  have  easy  access 

information 
documentation  relating  to  the  investment  products  backing  the  underlying 
investment options; 

the  pre-contractual 

to 

(c)  PRIIPs  manufacturers  provide  investors,  upon  their  request  and  in  good  time 
before  retail  investors  are bound by any  contract or offer to  invest in  a  given 
investment option, the complete costs of the PRIIP relating to this investment 
option.” 

(5) 

Article 8 is amended as follows: 

(a) 

in paragraph 3, point (aa) is added: 

‘(aa)  under a section titled ‘Product at a glance’ a dashboard with summarised 
information about all of the following: 

(i)  the type of the PRIIP, as referred to in point (c)(i); 

(ii) the summary risk indicator referred to in point (d)(i); 

(iii) the total costs of the PRIIP; 

(iv) the recommended holding period referred to in point (g)(ii); 

(v) whether the PRIIP offers the insurance benefits referred to in point (c) 
(iv);’ 

(b) 

in paragraph 3, point (b) is deleted. 

(c) 

in paragraph 3, point (c), point (ii) is replaced by the following: 

“(ii)  the  PRIIP’s  financial  objectives  and  the  means  for  achieving  those 
objectives,  and  in  particular  whether  those  objectives  will  be  achieved  by 
means  of  direct  or  indirect  exposure  to  the  underlying  investment  assets, 
including all of the following information: 

(1) 

(2) 

(3) 

a description of the underlying instruments or reference values; 

a specification of the markets the PRIIP invests in; 

information about how the return is determined;’; 

(d) 

the following point (ga) is inserted: 

‘(ga) 
for  PRIIPs  on  which  financial  market  participants  are  to  disclose  pre-
contractual  information  pursuant  to  Regulation  (EU)  2019/2088  of  the 
European  Parliament  and  of  the  Council**  and  Commission  Delegated 
Regulation  2022/1288***,  under  a  section  titled  ‘How  environmentally 
sustainable is this product?’, the following information: 

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(i)  the  minimum  proportion  of  the  investment  of  the  PRIIP  that  is  associated 
with  economic  activities  that  qualify  as  environmentally  sustainable  in 
accordance with Articles 5 and 6 of Regulation (EU) 2020/852 of the European 
Parliament and of the Council****; 

(ii) the expected greenhouse gas emissions intensity associated with the PRIIP 
pursuant to Delegated Regulation 2022/1288;’; 

(e)  Paragraph 4 is deleted. 

(f) 

In paragraph 5, the third subparagraph is replaced by the following: 

“The  ESAs  shall  submit  those  draft  regulatory  technical  standards  to  the 
Commission by … [PO please insert the date= one year after the date of entry 
into force of this amending Regulation].” 

_______________ 
** Regulation (EU) 2019/2088 of the European Parliament and of the Council 
of  27  November  2019  on  sustainability‐related  disclosures  in  the  financial 
services sector (OJ L 317, 9.12.2019, p. 1). 
***  Commission  Delegated  Regulation  (EU)  2022/1288  of  6  April  2022 
supplementing Regulation (EU) 2019/2088 of the European Parliament and of 
the Council with regard to regulatory technical standards specifying the details 
of the content and presentation of the information in relation to the principle of 
‘do  no  significant  harm’,  specifying 
the  content,  methodologies  and 
presentation of information in relation to sustainability indicators and adverse 
sustainability  impacts,  and  the  content  and  presentation  of  the  information  in 
relation  to  the  promotion  of  environmental  or  social  characteristics  and 
sustainable  investment  objectives  in  pre-contractual  documents,  on  websites 
and in periodic reports (OJ L 196, 25.7.2022, p. 1). 
****Regulation (EU) 2020/852  of the European Parliament and of the Council 
of 18 June 2020 on the establishment of a framework to facilitate sustainable 
investment,  and amending Regulation  (EU) 2019/2088 (OJ  L 198, 22.6.2020, 
p. 13).’; 

(6) 

Article 10(2) is amended as follows: 

(a) 

point (b) is replaced by the following : 

‘(b)  the  conditions  under  which  the  key  information  document  must  be  revised, 
distinguishing  between  PRIIPs  that  are  still  made  available  to  retail  investors  and 
PRIIPs that are no longer made available;” 

(b) 

the second and third subparagraphs are replaced by the following:   

“The  ESAs  shall  take  into  account  situations  where  a  PRIIP  is  no  longer  made 
available to  retail  investors. The ESAs shall submit  those draft regulatory technical 
standards to the Commission by … [PO please insert the date = one year after date of 
entry into force of this amending Regulation]. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred  to  in  the  first  subparagraph  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.’; 

(7) 

Article 14 is replaced by the following : 

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‘Article 14 

(1) 

(2) 

 The person advising on, or selling, a PRIIP shall provide the key information 
document to retail investors free of charge. The information shall be provided 
in  an  electronic  format,  unless  the  retail  investor  has  requested  to  receive  the 
key information document on paper. The person advising on, or selling a PRIIP 
shall inform the retail investors about their right to receive the key information 
document on paper free of charge. 

 The  electronic  format  of  the  key  information  document  may  be  provided  by 
means  of  an  interactive  tool  that  enables  the  retail  investor  to  generate 
personalised key information based on the information in the  key information 
document or the information underlying it. That tool shall respect the following 
conditions: 

(a) thee interactive tool, or its use, shall not alter the understanding of 
the key information document; 

(b) all key information shall be presented; 

(c)  the  key  information  document  shall  be  easily  accessible  through  a 
link  next  to  the  interactive  tool,  and  the  link  shall  be  accompanied  by 
the  following  message  "It  is  recommended  to  download  and  store  the 
key information document”; 

(d) the interactive tool shall allow investors to  simulate costs over the 
recommended holding period. 

Where the key information document is  provided in  accordance with  the first 
subparagraph,  its  format  may  be  adapted  compared  to  the  presentation  of  the 
key information document referred to in Article 8. 

(3)  The  ESAs  shall  develop  draft  regulatory  technical  standards  specifying  the 
modalities for personalising the information as referred to in paragraph 2, the 
first  subparagraph,  and  the  conditions  for  adapting  the  formatting  of  the 
information, as referred to in paragraph 2, the second subparagraph. 

In addition to the modalities referred to in the first subparagraph, the regulatory 
technical  standards  shall  include  the  conditions  for  personalising  the  key 
investor information in the following manners: 

(a) 

(b) 

(c) 

the  conditions  for  personalising  the  information  to  allow  investors  to 
simulate  costs  over  a  holding  period  that  is  different  from  the 
recommended holding period; 

the  conditions  for  personalising  the  information  to  allow  investors  to 
compare different PRIIPs; 

the conditions for personalising the information to make it accessible to 
persons with disabilities. 

(4)  The  key  information  document  may  be  presented  in  a  layered  format.  In  that 
case,  the  dashboard  referred  to  in  Article  8(3),  point  (aa)  shall  appear  in  the 
first layer. 

(5)  The  retail  investor  shall  be  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. 

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(6)  The  key  information  document  shall  remain  accessible  on  the  website  of  the 
person  advising  or  selling  the  PRIIPS,  and  shall  remain  capable  of  being 
downloaded  and  stored  in  a  durable  medium,  for  such  period  of  time  as  the 
retail  investor  may  need  to  consult  it.  Where  the  PRIIP  manufacturer  has 
revised  the  key  information  document  as  referred  to  in  Article  10,  the  PRIIP 
manufacturer  shall  provide  the  retail  investors  with  previous  versions  upon 
request. 

Article 2  

Entry into force and application 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. It shall apply from [PO please insert the date = 18 
months after the date of entry into force of this amending Regulation]. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

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