ESA Joint Committee · priips-149 Final

[Question deleted] (Revised 21 December 2022) 8. The paragraph which comes directly after the heading “Table 1” (“The person advising on or selling you this product …”) is duplicate in view to Elemen

Regulation
PRIIPs
Answered
2022-11-14
Answer provided by
ESAs (EBA, ESMA, EIOPA)
⚠

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Question

[Question deleted] (Revised 21 December 2022) 8. The paragraph which comes directly after the heading “Table 1” (“The person advising on or selling you this product …”) is duplicate in view to Element A of Annex V and does not apply to all PRIIPs. Is this compulsory? Yes, because these statements apply to two different sections of the KIDs (costs and performance scenarios) in which this information is equally relevant. (Answer provided by the ESAs on the application of the PRIIPs Delegated Regulation, revised on 21 December 2022) 9. What shall be shown as “Total costs” in Table 1? “Total costs” in Table 1 of Annex VII of the Delegated Regulation shall show in monetary terms the aggregated amount of costs associated with the investment for the case that the retail investor invests the amounts indicated in points 90 and 91 of the Delegated Regulation (10 000 EUR or 1 000 EUR yearly for regular premium or regular payment products or an amount of similar magnitude if not Euros). This figure shall consider all the costs indicated in the list of costs and the calculation methodologies in Annex VI, Part 1 of the Delegated Regulation, as per point 61 and 62 of Annex VI. The methodology “reduction in yield” described in Part 2 of Annex VI shall only be used to calculate the summary costs indicators in percentage terms (“annual cost impact”) in Table 1. (Answer provided by the ESAs on the application of the PRIIPs Delegated Regulation, revised on 21 December 2022) 10. What type of information on performance fees should be included in the line “performance fees” of the table “composition of the cost” of the cost section of the KID?

Answer

This line should clearly set out the information necessary to explain the existence of the performance fee, the basis on which the fee is charged and when the fee applies. Where performance fees are calculated based on performance against a reference benchmark index, the KID should display the name of the benchmark and the information published on past performance should be shown against this benchmark. In case it is allowed for a performance fee to be paid also in times of negative performance (for example, a fund has overperformed its reference benchmark index but, overall, has a negative performance), there should be a prominent statement of this fact as part of the explanation.

This Q&A is published by ESA Joint Committee (EBA, ESMA, EIOPA) and is non-binding. It does not constitute legal advice. Updated weekly from official ESA sources.

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