Key information document (KID), Packaged retail and insurance-based investment products (PRIIPs)

Point 16 of Annex IV of the PRIIPs Delegated Regulation specifies that the criteria used for the assessment of the benchmark or proxy should be consistent with, inter alia, the type of assets in which the PRIIP invests, and the asset allocation of the PRIIP (point 16 c)). However, point 16(d) specifies that ‘potential assets in which the PRIIP invests, consistent with the investment policy’, should also be taken into account. Points 13 and 14 of Annex IV also envisage the case that different asset types or exposures are offered. It is, therefore, not permissible to ex ante dismiss any such potential assets in the assessment of the appropriateness of the benchmark or proxy, given that it is aimed that the benchmark or proxy would remain appropriate over time, including where the asset allocation may have changed. At the same time, the extent to which an appropriate benchmark or proxy can be used, fully taking into account all possible future asset allocations, will depend on the specific case, including whether it is a new or longstanding product, the range of eligible assets, the likelihood of investment in specific asset classes even though the investment policy theoretically allows such investment, or the frequency of changes in the assets allocation. Overall, the methods used in the assessment should be plausible and appropriate for the particular product.