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On 22nd December 2022, the Malta Financial Services
Authority (the “MFSA“) issued a circular
on the applicability of Regulation (EU) No 1286/2014 (the
“Regulation“) on Key Information
Documents for Packages Retail and Insurance-based Investment
Products (“PRIIPs“).
By way of background, on 1st January 2018, the
Regulation introduced the key information documents for PRIIPs
(“PRIIPs KID“) for all packaged retail
and insurance-based investment products made available to retail
investors in the European Economic Area (EEA), in order to provide
retail investors with the information necessary to make an informed
investment decision. It provides that PRIIPs KIDs need to be simple
enough for retail investors to assess and compare products, and
thus must include, inter alia, (i) the nature and features of the
product, including whether it is possible to lose capital, (ii) the
costs and risk profile of the product, and (iii) relevant
performance information.
Units in undertakings for collective investment in transferable
securities (“UCITS“) and alternative
investment funds (“AIFs“) constitute
PRIIPs for the purposes of the Regulation. However, UCITS
management companies and self-managed UCITS were exempt from the
requirements of the PRIIPs Regulation through Directive 2021/2261
as regards the use of key information documents by management
companies of UCITS. However, following the publication of
Commission Delegated Regulation (EU) 2022/975 of 17 March 2022, as
of 1 January 2023, the Regulation will also apply to UCITS
management companies and self-managed UCITS who also offer PRIIPs
to retail investors.
UCITS management companies, self-managed UCITS and where
applicable alternative investment fund managers (AIFMs), and
self-managed AIFs (collectively, the “Licence
Holders“) are required to produce a PRIIPs KID as
specified in the Regulation. This shall, in turn, be distributed to
the retail investors in good time prior to entering into any
contract. Licence Holders already offering PRIIPs to retail
investors should file the PRIIPs KID with the MFSA within 35
business days of 1 January 2023. On the other hand, PRIIPs KIDs
submitted as part of a new application should be submitted through
the LH Portal together with all other application documents.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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