European regulation

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European regulation

Readiness for regulation – PRIIPs and MiFID II 

In January 2018, two new pieces of regulation that will impact the financial services industry come into effect:

  • The Packaged Retail and Insurance-based Investment Products regulation (PRIIPs) – comes into effect on 1 January 2018.
  • The Markets in Financial Instruments Directive II (MiFID II) – comes into effect on 3 January 2018.

Both sets of regulations are aimed at improving the information available to investors so that they can better understand investment products and make more informed decisions. Below are details on our readiness to meet the new regulations and what they mean for you when doing business with us from the start of January.

We will be adding further example documentation as it becomes available over the coming weeks so please look out for our further communications.

 

PRIIPs

Key Information Documents (KIDs) for products and funds

From 1 January 2018 you are required to provide a KID to all clients when recommending a product that is classified as a PRIIP. For Old Mutual Wealth this means clients must be given a KID for all of the underlying funds available through our CIA and ISA, and also for our Collective Investment Bond (CIB) as an insurance product. We will make the fund KIDs available on the platform in the same way that KIIDs are provided today and, in addition, place our CIB KID alongside other pre-sales documentation during the relevant transactions. As the CIA and ISA are not classed as PRIIPS themselves, there is no requirement for a ‘wrapper KID’.  Also, the CRA is exempt from this legislation.

The new fund KIDs are very similar to the existing Key Investor Information Documents (KIIDs), but go further in providing investors with information to better understand and compare the key features, risks, rewards, and costs of different investments. Funds that already produce a KIID have an exemption and can continue providing the current document until January 2020, and then start providing the new KID thereafter. This may mean that you end up presenting similar, but slightly different, fund documents to your clients, which may require explanation. You will need to provide the KID to clients in advance of transactions for new business (ISA/CIA/CIB) and switches (ISA/CIA).

MiFID II

– covers only our CIA and ISA products

Financial Adviser Verification