What type of information should be included in the “What is this product?” section of the KID of
index-tracking UCITS and index-tracking leveraged UCITS?
For index-tracking UCITS, the following inform

Question

What type of information should be included in the “What is this product?” section of the KID of
index-tracking UCITS and index-tracking leveraged UCITS?
For index-tracking UCITS, the following information should be included in a summary form in the “What
is this product?” section:
a) a clear description of the indices including information on their underlying components. In order
to avoid the need to update the document frequently, the KID can direct investors to a web site
where the exact compositions of the indices are published;
b) information on how the index will be tracked (for example whether it will follow a full or sample
based physical replication model or a synthetic replication) and the implications of the chosen
method for investors in terms of their exposure to the underlying index and counterparty risk;
c) information on the anticipated level of tracking error in normal market conditions;
d) a description of factors that are likely to affect the ability of index-tracking UCITS to track the
performances of the indices, such as transaction costs, small illiquid components, dividend
reinvestment etc.
For index-tracking leveraged UCITS, the following information should be included in a summary form in
the “What is this product?

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

” section:
a) a description of the leverage policy, how this is achieved (i.e. whether the leverage is at the level
of the index or arises from the way in which the UCITS obtains exposure to the index), the cost of
the leverage (where relevant) and the risks associated with this policy;
b) a description of the impact of any reverse leverage (i.e. short exposure);
c) a description of how the performance of the UCITS may differ significantly from the multiple of the
index performance over the medium to long term.
The summary information included in the KID needs to reflect the relevant legislative requirements in
the PRIIPs Regulation, such as that the language used is clear, succinct and comprehensible to the retail
investor.

What type of information should be included in the “What is this product?” section of the KID of index-tracking UCITS and index-tracking leveraged UCITS? For index-tracking UCITS, the following inform

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