ESA Joint Committee · priips-68 Final

Is currency risk described by Risk Element C applicable to investment funds, or should currency risk generally be considered by wrapper products / multi-option products only? In case currency risk is

Regulation
PRIIPs
Answered
2024-03-15
Answer provided by
ESAs (EBA, ESMA, EIOPA)
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Question

Is currency risk described by Risk Element C applicable to investment funds, or should currency risk generally be considered by wrapper products / multi-option products only? In case currency risk is applicable to investment funds, at which level shall currency risk be determined – the portfolio/sub- fund level or at the share class level – in relation to the currency of the investor in the EU member state?

Answer

In accordance with Article 3(2)(c) of the PRIIPs Delegated Regulation, the narrative element C on currency risk is applicable to PRIIPs that are denominated in a currency other than the official currency of the Member State where the PRIIP is being marketed. Therefore, it relates to the currency in which pay outs are made to retail investors. Consequently, if a PRIIP, including an investment fund, is available to retail investors in a Member State with a different currency to the currency of the product, then the KID needs to include the SRI narrative element C. Equally, if a PRIIP can only be accessed by retail investors in a Member State with the same currency as the currency of the product then the KID should not include the SRI narrative element C.
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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