The exchange as manufacturer may not know all the costs, since some costs are added by the broker.
In this situation is it acceptable for the exchange only to report the costs which relate to the prod

Question

The exchange as manufacturer may not know all the costs, since some costs are added by the broker.
In this situation is it acceptable for the exchange only to report the costs which relate to the product
as they create it?
The manufacturer should only need to include distribution costs to the extent that the costs are fixed
(e.g. certain) and the manufacturer is aware of them. Therefore an exchange does not need to include
costs that are added by the broker, where these are different between different brokers. With respect
to extra costs, Annex VII (table 1) of the Delegated Regulation specifies that the following explanatory
text should be included in the KID: “The person advising on or selling you this product may charge you
other costs. If so, this person will provide you with information about these costs, and how they affect
your investment”.
(Answer provided by the ESAs on the application of the PRIIPs Delegated Regulation, revised on 21
December 2022)
6. In the case of subscription products should manufacturer re-evaluate the fair value during the
offering period and to modify the entry costs if a relevant change happened, regardless of whether
his benefits do not increase/reduce, i.e. just because the market conditions changed the value of the
PRIIPs?

ESA Joint Committee (EBA, ESMA, EIOPA) · Accepted Answer

Yes. According to Article 15 of the Delegated Regulation, PRIIP manufacturers shall review the
information contained in the KID every time there is a change that significantly affects or is likely to
significantly affect the information contained in the KID, to verify whether the information contained
in the KID remains accurate, fair, clear, and not misleading.
Regarding costs, if during the offering period the market conditions affect the fair value of the product,
causing a relevant change in the implicit costs of the product the client will assume when he subscribes

for the product, the manufacturer shall update the KID to ensure it remains accurate and inform the
potential client before the subscription.
According to point 44 of Annex VI of the Delegated Regulation, in particular in the case of subscription
products where long offering periods or high market volatility exists, a criterion to update cost
information shall be defined by the manufacturer.
This is without prejudice of the obligations of distributors in these situations according to the applicable
Regulations.

The exchange as manufacturer may not know all the costs, since some costs are added by the broker. In this situation is it acceptable for the exchange only to report the costs which relate to the prod

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