GERMANY: BVI: Include Past Performance in PRIIPs KIDs

Monday April 27 2020

The EU is currently working on new technical regulatory standards to remedy the deficient PRIIPs key information documents (PRIIPs-KID), as requested by BVI. Among other things, this review involves the forward-looking performance scenarios presented up to now. Based on the results of a consultation, the European Supervisory Authorities (ESAs) intend to propose using past performance as the basis of performance information for funds. However, the EU Commission is opposed to this proposal.

In the opinion of BVI, past performance has to be included in the PRIIPs-KID at least in addition to performance scenarios. This is a proven and the only objective way of informing investors about performance. In addition, even the EU Commission has recently found in its consumer study (final report / summary) that investors’ understanding of the performance prospects of products is greater if the forward-looking performance scenarios are supplemented by information on past performance. The Commission has to close this gap and finally remedy other serious PRIIPs shortcomings, such as the incorrect calculation method for transaction costs, so that fund investors can also receive useful PRIIPs-KID from the beginning of January 2022.

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