Key information document (KID)

Yes, this provision applies from 1 January 2023.As indicated in Annex IV, point 2 of the original PRIIPs Delegated Regulation, applicable on 1 January 2018 (Commission Delegated Regulation (EU) 2017/653), the stress scenario intended to “set out significant unfavourable impacts of the product not covered in the unfavourable scenario”. In other words, the stress scenario was always intended to show a value lower than the unfavourable scenario, i.e. to reflect adverse market circumstances that might not be covered sufficiently by the unfavourable scenario. Following the implementation of the PRIIPs rules in January 2018, it was identified that in a limited number of very specific circumstances, the prescribed calculation methods for the stress and unfavourable scenarios might result in the stress scenario showing a better result than the unfavourable scenario in the KID. Based on this, when reviewing the rules in Commission Delegated Regulation (EU) 2017/653, the ESAs proposed to introduce an explicit rule (now in Annex IV, point 20 of the revised PRIIPs Delegated Regulation, applicable from 1 January 2023) to ensure that in all cases the stress scenario would not show a better value than the unfavourable scenario.