Search Legislation

Advanced Search

Commission Delegated Regulation (EU) 2017/653Show full title

Commission Delegated Regulation (EU) 2017/653 of 8 March 2017 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council on key information documents for packaged retail and insurance-based investment products (PRIIPs) by laying down regulatory technical standards with regard to the presentation, content, review and revision of key information documents and the conditions for fulfilling the requirement to provide such documents (Text with EEA relevance) (revoked)

Help about what version

What Version

Help about UK-EU Regulation

Legislation originating from the EU

When the UK left the EU, legislation.gov.uk published EU legislation that had been published by the EU up to IP completion day (31 December 2020 11.00 p.m.). On legislation.gov.uk, these items of legislation are kept up-to-date with any amendments made by the UK since then.

Close

This item of legislation originated from the EU

Legislation.gov.uk publishes the UK version. EUR-Lex publishes the EU version. The EU Exit Web Archive holds a snapshot of EUR-Lex’s version from IP completion day (31 December 2020 11.00 p.m.).

Changes to legislation:

There are currently no known outstanding effects by UK legislation for Commission Delegated Regulation (EU) 2017/653. Help about Changes to Legislation

EUR 2017 No. 653 may be subject to amendment by EU Exit Instruments made by the Financial Conduct Authority under powers set out in The Financial Regulators' Powers (Technical Standards etc.) (Amendment etc.) (EU Exit) Regulations 2018 (S.I. 2018/1115), regs. 2, 3, Sch. Pt. 1. These amendments are not currently available on legislation.gov.uk. Details of relevant amending instruments can be found on their website/s.

Close

Changes to Legislation

Revised legislation carried on this site may not be fully up to date. At the current time any known changes or effects made by subsequent legislation have been applied to the text of the legislation you are viewing by the editorial team. Please see ‘Frequently Asked Questions’ for details regarding the timescales for which new effects are identified and recorded on this site.

  1. Introductory Text

  2. CHAPTER I CONTENT AND PRESENTATION OF THE KEY INFORMATION DOCUMENT

    1. Article 1.General information section

    2. Article 2.‘What is this product?’ section

    3. Article 3.‘What are the risks and what could I get in return?’ section

    4. Article 4.‘What happens if [the name of the PRIIP manufacturer] is unable to pay out?’ section

    5. Article 5.‘What are the costs?’ section

    6. Article 6.‘How long should I hold it and can I take my money out early?’ section

    7. Article 7.‘How can I complain?’ section

    8. Article 8.‘Other relevant information’ section

    9. Article 9.Template

  3. CHAPTER II SPECIFIC PROVISIONS ON THE KEY INFORMATION DOCUMENT

    1. Article 10.PRIIPs offering a range of options for investment

    2. Article 11.‘What is this product’ section in the generic key information document

    3. Article 12.‘What are the risks and what could I get in return?’ section in the generic key information document

    4. Article 13.‘What are the costs?’ section in the generic key information document

    5. Article 14.Specific information on each underlying investment option

  4. CHAPTER III REVIEW AND REVISION OF THE KEY INFORMATION DOCUMENT

    1. Article 15.Review

    2. Article 16.Revision

  5. CHAPTER IV DELIVERY OF THE KEY INFORMATION DOCUMENT

    1. Article 17.Conditions on good time

    2. Article 18.Final Provision

  6. Signature

    1. ANNEX I

      TEMPLATE FOR THE KEY INFORMATION DOCUMENT

    2. ANNEX II

      METHODOLOGY FOR THE PRESENTATION OF RISK

      1. PART 1 Market risk assessment

        1. Determination of the market risk measure (MRM)

          1. 1. Market risk is measured by the annualised volatility corresponding to...

          2. 2. The PRIIP shall be assigned a MRM class according to...

        2. Specification of PRIIP categories for the purposes of the market...

          1. 3. For the purposes of determining market risk, PRIIPs are divided...

          2. 4. Category 1 covers the following:

          3. 5. Category 2 covers PRIIPs which, either directly or on a...

          4. 6. Category 3 covers PRIIPs whose values reflect the prices of...

          5. 7. Category 4 covers PRIIPs whose values depend in part on...

        3. Use of appropriate benchmarks or proxies to specify PRIIPs categories...

        4. MRM class determination for Category 1 PRIIPs

          1. 8. The MRM class for Category 1 PRIIPs shall be 7,...

        5. MRM class determination for Category 2 PRIIPs

          1. 9. The VaR shall be calculated from the moments of the...

          2. 10. Where data on daily prices covering a period of 5...

          3. 11. The return over each period is defined as the natural...

          4. 12. The VaR measure in return space is given by the...

          5. 13. The VEV is given by:

          6. 14. For PRIIPs that are managed according to investment policies or...

          7. 15. The PRIIP shall be assigned to a MRM class as...

        6. MRM class determination for Category 3 PRIIPs

          1. 16. The VaR in price space shall be calculated from a...

          2. 17. The VEV is given by:

          3. 18. The PRIIP shall be assigned to a MRM class as...

          4. 19. The minimum number of simulations is 10 000.

          5. 20. The simulation is based on bootstrapping the expected distribution of...

          6. 21. For the purposes of the simulation referred to in points...

          7. 22. For each simulation of a spot price (or level), the...

          8. 23. For curves, a principal component analysis (PCA) shall be performed...

          9. 24. For PRIIPS in Category 3 that are characterized by an...

        7. MRM class determination for Category 4 PRIIPs

          1. 25. Where the PRIIP performance depends on a factor or factors...

          2. 26. The different components of the PRIIP that contribute to the...

          3. 27. The component of the PRIIP that depends wholly or partly...

          4. 28. The VEV of each component of the PRIIP shall be...

          5. 29. For Category 4 PRIIPs that are characterized by an unconditional...

      2. PART 2 Methodology for assessing credit risk

        1. I. GENERAL REQUIREMENTS

          1. 30. A PRIIP or its underlying investments or exposures shall be...

          2. 31. Where an entity directly engages to make a payment to...

          3. 32. If all payment obligations of an obligor or one or...

          4. 33. For PRIIPs which are exposed to underlying investments or techniques,...

          5. 34. Where the credit risk is entailed solely at the level...

          6. 35. Where a PRIIP is exposed to multiple underlying investments entailing...

          7. 36. Underlying investments or exposures to exchange-traded derivatives or cleared OTC...

        2. II. CREDIT RISK ASSESSMENT

          1. Credit assessment of obligors

            1. 37. Where available, a PRIIP manufacturer shall define ex-ante one or...

            2. 38. The level of credit risk of the PRIIP and each...

          2. Allocation of credit assessments to credit quality steps

            1. 39. The allocation of credit assessments of ECAIs to an objective...

            2. 40. In the case of credit risks assessed on a look-through...

            3. 41. In the case of credit risks assessed on a cascade...

            4. 42. The credit quality step pursuant to point 38 of this...

            5. 43. If the obligor has no external credit assessments, the default...

        3. III. CREDIT RISK MEASURE

          1. 44. A PRIIP shall be allocated to a credit risk measure...

          2. 45. Table on the mapping of credit quality steps into a...

          3. 46. The CRM may be assigned as 1 where the assets...

          4. 47. The CRM may be assigned as 2 where the assets...

          5. 48. Where credit risk is to be assessed on a look-through...

          6. 49. Where a PRIIP is not able to satisfy the criteria...

          7. 50. The CRM pursuant to point 45 of this Annex shall...

          8. 51. The CRM pursuant to point 45 of this Annex shall...

      3. PART 3 Aggregation of market and credit risk into the summary risk...

        1. 52. The overall summary risk indicator (SRI) is assigned according to...

        2. Monitoring data with relevance for the summary risk indicator

          1. 53. The PRIIP manufacturer shall monitor market data relevant to the...

          2. 54. The PRIIP manufacturer shall also monitor credit risk criteria relevant...

          3. 55. A review of the MRM class shall always be carried...

      4. PART 4 Liquidity risk

        1. 56. A PRIIP shall be considered as having a materially relevant...

        2. 57. A PRIIP shall be considered illiquid, whether contractually or not,...

        3. 58. A PRIIP shall be considered liquid in all other cases....

    3. ANNEX III

      PRESENTATION OF SRI

      1. Presentation format

        1. 1. PRIIP manufacturers shall use the format below for the presentation...

      2. Completion guidance with regard to the SRI

        1. 2. The narrative explanation after the SRI shall briefly explain the...

        2. 3. Immediately below the SRI, the time frame of the recommended...

        3. 4. As applicable for each PRIIP, the narrative explanation shall include:...

        4. 5. For PRIIPs offering a range of options for investment, PRIIP...

        5. 6. For derivatives that are futures, call options and put options...

      3. Narrative explanations

        1. 7. For the purposes of the SRI presentation, including point 4...

    4. ANNEX IV

      PERFORMANCE SCENARIOS

      1. Number of scenarios

        1. 1. The four performance scenarios under this Regulation which shall show...

        2. 2. The stress scenario shall set out significant unfavourable impacts of...

        3. 3. An additional scenario for insurance-based investment products shall be based...

      2. Calculation of scenario values for the recommended holding period

        1. 4. The scenario values under different performance scenarios shall be calculated...

        2. 5. The unfavourable scenario shall be the value of the PRIIP...

        3. 6. The moderate scenario shall be the value of the PRIIP...

        4. 7. The favourable scenario shall be the value of the PRIIP...

        5. 8. The stress scenario shall be the value of the PRIIP...

        6. 9. For Category 2 PRIIPs, the expected values at the end...

        7. 10. For Category 2 PRIIPs, the calculation of the stress scenario...

        8. 11. For Category 2 PRIIPs, the expected values at the end...

        9. 12. For Category 3 PRIIPs, the following adjustments shall be made...

        10. 13. For Category 3 PRIIPs, the following adjustments shall be made...

        11. 14. For Category 3 PRIIPs, the stress scenario shall be the...

        12. 15. For Category 4 PRIIPs, the method under point 27 of...

        13. 16. For Category 1 PRIIPs as defined in point 4(a) of...

        14. 17. For Category 1 PRIIPs, that are futures, call options and...

        15. 18. For Category 1 PRIIPs as defined in point 4(c) of...

      3. Calculation of expected values for intermediate holding periods

        1. 19. For PRIIPs with a recommended holding period between 1 and...

        2. 20. For PRIIPs with a recommended holding period of 3 years...

        3. 21. For PRIIPs with a recommended holding period of 1 year...

        4. 22. For Category 2 PRIIPs, the values to be shown for...

        5. 23. For Category 1 PRIIPs and Category 4 PRIIPs, the values...

        6. 24. For Category 3 PRIIPs, to produce the favourable, moderate, unfavourable...

        7. 25. For Category 1 PRIIPs that are futures, call options and...

        8. 26. For favourable, moderate and unfavourable scenarios at intermediate periods, the...

        9. 27. The unfavourable scenario shall be the estimate of the value...

        10. 28. The moderate scenario shall be the estimate of the value...

        11. 29. The favourable scenario shall be the estimate of the value...

        12. 30. The stress scenario shall be the estimate of the value...

      4. General requirements

        1. 31. The performance of the PRIIP shall be calculated net of...

        2. 32. Performance shall be presented in monetary units. The amounts used...

        3. 33. Performance shall also be presented in percentage terms, as the...

        4. 34. For an insurance based investment product, the following shall apply...

    5. ANNEX V

      METHODOLOGY FOR THE PRESENTATION OF PERFORMANCE SCENARIOS

      1. PART 1 General presentation specifications

        1. 1. The performance scenarios shall be presented in a way that...

        2. 2. Where performance scenarios may be shown only at maturity or...

        3. 3. In all cases, the narrative explanations set out in elements...

      2. PART 2 Presentation of performance scenarios

    6. ANNEX VI

      METHODOLOGY FOR THE CALCULATION OF COSTS

      1. PART 1 List of costs

        1. I. LIST OF COSTS OF INVESTMENTS FUNDS (AIFs AND UCITS)

          1. Costs to be disclosed

            1. One-off costs

              1. 1. A one-off cost is an entry or exit cost which...

              2. 2. One-off costs are costs borne by the retail investor that...

              3. 3. One-off costs include, but are not limited to, the following...

            2. Recurring Costs

              1. 4. Recurring costs are payments deducted from the assets of an...

              2. 5. Recurring costs include, but are not limited to, the following...

            3. Incidental costs

              1. 6. The following types of incidental costs shall be taken into...

          2. Calculation of specific types of costs of investments funds

            1. Transaction costs

              1. 7. Transaction costs shall be calculated on an annualised basis, based...

              2. 8. The aggregate transaction costs for a PRIIP shall be calculated...

              3. 9. When calculating the transaction costs incurred by the PRIIP over...

              4. 10. Estimates of transaction costs using the methodology described below in...

            2. Treatment of anti-dilution mechanisms

              1. 11. Where a PRIIP has a pricing mechanism that offsets the...

            3. Actual transaction costs

              1. 12. The actual transaction costs for each transaction shall be calculated...

              2. 13. The net realised execution price shall be determined as the...

              3. 14. The arrival price shall be determined as the mid-market price...

              4. 15. Where information about the time when the order to transact...

              5. 16. Costs associated with transactions undertaken by PRIIPs and concerning financial...

              6. 17. In calculating the costs associated with foreign exchange, the arrival...

              7. 18. In calculating the costs associated with orders that are initially...

            4. Transaction costs for other assets

              1. 19. When estimating transaction costs for assets other than assets as...

              2. 20. The transaction cost estimate must not be less than the...

            5. Transaction costs for new PRIIPs

              1. 21. For PRIIPs that have been operating for less than 3...

              2. 22. Estimates of portfolio turnover for a PRIIP that has been...

              3. 23. For PRIIPs that have been operating for less than three...

            6. Performance related fees

              1. 24. To calculate performance related fees, the following steps shall be...

            7. Carried interests

              1. 25. To calculate carried interests, the following steps shall be taken:...

              2. 26. If no carried interests are taken throughout the investment, a...

        2. II. LIST OF COSTS OF PRIPS OTHER THAN INVESTMENT FUNDS

          1. Costs to be disclosed

            1. One-off costs

              1. 27. A one-off cost is an entry and exit cost which...

              2. 28. One-off costs are borne by a PRIP other than an...

            2. One-off entry costs and charges

              1. 29. One-off entry costs and charges include, but are not limited...

            3. One-off exit costs and charges

              1. 30. One-off exit costs and charges include, but are not limited...

            4. Recurring Costs

              1. 31. Recurring costs are payments regularly deducted from all payments due...

              2. 32. Recurring costs include all types of cost borne by a...

              3. 33. The following list is indicative but not exhaustive of the...

            5. Costs of PRIPs referred to in point 17 of Annex...

              1. 34. One-off exit costs and charges are exchange fees, clearing fees...

              2. 35. Recurring costs are hedging costs borne under normal market conditions...

            6. Calculation of implicit costs of PRIPs other than investment funds...

              1. 36. For the purposes of the calculation of the implicit costs...

              2. 37. The difference between the price and the fair value of...

              3. 38. Fair value is the price that would be received to...

              4. 39. The fair value policy that governs the measurement of the...

              5. 40. The rules referred to in point 39 of this Annex...

              6. 41. The fair value of a structured product shall be determined...

              7. 42. If the fair value cannot be derived from market prices,...

              8. 43. The valuation technique referred to in point 42 of this...

              9. 44. In the case of subscription products, the fair value shall...

              10. 45. Where preliminary terms are used, costs shall be calculated by...

              11. 46. Where variable subscription prices are used, a procedure on how...

        3. III. LIST OF COSTS OF INSURANCE-BASED INVESTMENT PRODUCTS

          1. Costs to be disclosed

            1. One-off costs

              1. 47. A one-off cost is an entry and exit cost which...

              2. 48. One-off costs are borne by an insurance-based investment product, whether...

              3. 49. One-off costs include, but are not limited to, the following...

            2. Recurring costs

              1. 50. Recurring costs are payments regularly deducted from all payments from...

              2. 51. The recurring costs include all types of costs borne by...

              3. 52. The following list is indicative but not exhaustive of the...

              4. 53. Where an insurance-based investment product invests a part of its...

          2. Cost disclosure of the biometric risk premium of insurance based...

            1. Costs part of biometric risk premiums

              1. 54. Biometric risk premiums are those premiums paid directly by the...

              2. 55. The fair value of biometric risk premiums is the expected...

              3. 56. Best estimate assumptions on future benefit payments from insurance coverage...

              4. 57. The estimated future benefit payments shall not include prudency margins...

              5. 58. For manufacturers within the scope of Directive 2009/138/EC these best...

              6. 59. The cost part of biometric risk premiums is the difference...

              7. 60. A PRIIP manufacturer may include the full biometric risk premiums...

      2. PART 2 Summary cost indicators and compound effect of the costs

        1. I. SUMMARY COST INDICATORS

          1. 61. The summary cost indicator of the PRIIP is the reduction...

          2. 62. For the calculation of the summary cost indicator the costs...

          3. One-off costs and one-off costs ratios

            1. 63. The entry and exit costs ratio of the PRIIP shall...

            2. 64. For the calculation of the entry and exit costs ratio...

          4. Recurring costs, portfolio transaction costs and insurance costs/other recurring costs...

            1. 65. The portfolio transaction costs, insurance costs and other recurring costs...

            2. 66. For the calculation of the portfolio transaction costs ratio and...

            3. 67. The other recurring costs ratio shall be the reduction of...

          5. Incidental costs and incidental costs ratios (performance fees and carried...

            1. 68. For the calculation of the performance fees ratio, the cost...

            2. 69. The ‘ongoing costs’, ‘performance fees’ and ‘carried interests’ as referred...

          6. Calculation of summary cost indicator

            1. 70. The summary cost indicator shall be calculated as the difference...

            2. 71. The estimation of future benefit payments under point 70 of...

            3. 72. For the purpose of the calculation of the cost free...

          7. Specific requirements for PRIPs other than investment funds

            1. 73. For the purpose of the calculation of the cost free...

          8. Specific requirements for insurance-based investment products

            1. 74. For the purpose of the calculations described in points 70...

            2. 75. To the extent recurring and one-off costs are covered by...

            3. 76. For profit participation for insurance based investment products the following...

          9. Calculation of ratios

            1. Anti-double counting principle

              1. 77. If one type of cost is covered by two or...

            2. Other specifications

              1. 78. The ratios shall be expressed as a percentage to two...

              2. 79. The ratios shall be calculated at least once a year....

              3. 80. The ratios shall be based on the most recent cost...

              4. 81. Apart from the first calculation for a new PRIIP, and...

              5. 82. The ex-post figures shall be based on recent cost calculations...

              6. 83. Information about the ratios that were applicable during previous years/periods...

              7. 84. Where the costs attributable to an underlying UCITS or AIF...

            3. Calculation methodology for new PRIIPs

              1. 85. In place of ex-post data, estimates shall be used in...

              2. 86. For PRIIPs which charge a fixed all-inclusive fee, that fee...

              3. 87. For PRIIPs which set a cap or maximum on the...

              4. 88. If, in the PRIIP manufacturer's opinion, expressing a figure to...

              5. 89. The PRIIP manufacturer shall ensure that the accuracy of the...

        2. II. COMPOUND EFFECT OF THE COSTS

          1. Common requirements to all types of PRIIPs

            1. 90. The table(s) referred to in Article 5 shall contain an...

            2. 91. Where the currency of the PRIIP is not in Euros,...

            3. 92. The total costs shall include one-off, recurring and incidental costs,...

            4. 93. Exit penalties are to be distinguished from other exit costs...

            5. 94. The relevance of exit penalties depends on the holding period...

    7. ANNEX VII

      PRESENTATION OF COSTS

      1. The Reduction in Yield (RIY) shows what impact the total...

      2. The amounts shown here are the cumulative costs of the...

      3. Table 1 Cost over time

      4. Table 2 Composition of costs

Back to top

Options/Help

Print Options

You have chosen to open the Whole Regulation

The Whole Regulation you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As adopted by EU): The original version of the legislation as it stood when it was first adopted in the EU. No changes have been applied to the text.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as adopted version that was used for the EU Official Journal
  • lists of changes made by and/or affecting this legislation item
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

Timeline of Changes

This timeline shows the different versions taken from EUR-Lex before exit day and during the implementation period as well as any subsequent versions created after the implementation period as a result of changes made by UK legislation.

The dates for the EU versions are taken from the document dates on EUR-Lex and may not always coincide with when the changes came into force for the document.

For any versions created after the implementation period as a result of changes made by UK legislation the date will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. For further information see our guide to revised legislation on Understanding Legislation.

Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as adopted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources

The data on this page is available in the alternative data formats listed: