ESA Joint Committee · priips-45 Final

Does the formula in Annex II Point 17 use the simulated value of the PRIIP divided by its initial value? Should the calculation of VEV post-issuance be based on the ratio of the simulated value divide

Regulation
PRIIPs
Answered
2017-07-04
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

Does the formula in Annex II Point 17 use the simulated value of the PRIIP divided by its initial value? Should the calculation of VEV post-issuance be based on the ratio of the simulated value divided by its initial value, or the ratio of the simulated value divided by the current value of the PRIIP?

Answer

We would expect that the current value seems more appropriate. When calculating the VEV, the ratio should reflect either the initial price to be paid at the time of the first production of the KID, or the price at the point of the review and revision of the KID. The VaR that is used to calculate the VEV is specified under Point 1 of Annex II as ‘the percentage of the amount invested that is returned to the retail investor’, and is a reference to a rate of return based on the value of units in the PRIIP at the point at which the KID is being prepared. In more general terms, it should be stressed that the figures to be shown in the KID, are presented according to a standardised and comparable starting point (for most PRIIPs 10 000 EUR according to Annex VI Point 90).
View original on ESA Joint Committee (EBA, ESMA, EIOPA) ↗

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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