ANNEX III - PRESENTATION OF SRI
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Article II – METHODOLOGY FOR THE PRESENTATION OF RISK ⬅️ | ➡️ Article IIII – PERFORMANCE SCENARIOS
Presentation format
1.
PRIIP manufacturers shall use the format below for the presentation of the SRI in the key information document. The relevant number shall be highlighted as shown depending on the SRI for the PRIIP.
Completion guidance with regard to the SRI
2.
The narrative explanation after the SRI shall briefly explain the purpose of the SRI and the underlying risks.
3.
Immediately below the SRI, the time frame of the recommended holding period shall be indicated. In addition, a warning shall be included directly below the SRI as set out in the above template in the following cases:
(a)
where the risk of the PRIIP is considered to be significantly higher if the holding period is different;
(b)
where a PRIIP is considered to have a materially relevant liquidity risk, whether this is contractual in nature or not;
(c)
where a PRIIP is considered to be illiquid whether this is contractual in nature or not.
4.
As applicable for each PRIIP, the narrative explanation shall include:
(a)
a warning in bold font where:
(i)
a PRIIP is considered to have currency risk as referred to in Article 3(2)(c) of this Regulation (Element C);
(ii)
a PRIIP holds a possible obligation to add to the initial investment, (Element D);
(b)
where applicable, an explanation of risks materially relevant to the PRIIP which could not be adequately captured by the SRI (Element E);
(c)
a clarification:
(i)
that the PRIIP holds a (partial) capital protection against market risk where relevant, including a specification of the percentage of the invested capital that is protected (Element F);
(ii)
of the specific conditions of the limitations where the (partial) capital protection against market risk is limited (Element G);
(iii)
that the PRIIP holds no capital protection against market risk, where relevant (Element H);
(iv)
that the PRIIP holds no capital guarantee against credit risk, where relevant (Element I);
(v)
of the specific conditions of the limitations where the protection against credit risk is limited (Element J).
5.
For PRIIPs offering a range of options for investment, PRIIP manufacturers shall use the format referred to point 1 of this Annex for the presentation of the SRI, indicating all of the risk classes offered from the lowest risk class to the highest risk class.
6.
For derivatives that are futures, call options and put options traded on a regulated market or on a third-country market considered to be equivalent to a regulated market in accordance with 2014, Elements A, B, and, where relevant, H, shall be included.
6a.
For Category 1 PRIIPs as defined in point 4(b) of Annex II, the terminology used for the narratives explanations accompanying the SRI shall be adjusted, where appropriate, to reflect the specific features of the PRIIP, such as the absence of an initial investment amount.
Narrative explanations
7.
For the purposes of the SRI presentation, including point 4 of this Annex, the following narrative explanations shall be used, as appropriate:
[Element A] The summary risk indicator is a guide to the level of risk of this product compared to other products. It shows how likely it is that the product will lose money because of movements in the markets or because we are not able to pay you.
[Element B] We have classified this product as [1/2/3/4/5/6/7] out of 7, which is [1=‘the lowest’/2=‘a low’/3=‘a medium-low’/4=‘a medium’/5=‘a medium-high’/6=‘the second-highest’/7=‘the highest’] risk class.
[In addition, insert a
brief explanation of the classification of the product with a maximum of 300 characters in plain language
]
[An example explanation: This rates the potential losses from future performance at a [1=‘very low’/2=‘low’/3=‘medium-low’/4=‘medium’/5=‘medium-high’/6=‘high’/7=‘very high’] level, and poor market conditions [1, 2=‘are very unlikely to’/3=‘are unlikely to’/4=‘could’/5=‘will likely’/6=‘are very likely to’] impact [our] [the] capacity [of X] to pay you].
[[Where applicable:] Element C, in bold] Be aware of currency risk. You will receive payments in a different currency, so the final return you will get depend on the exchange rate between the two currencies. This risk is not considered in the indicator shown above.
[[Where applicable:] Element D] In some circumstances you may be required to make further payments to pay for losses. (in bold) The total loss you may incur may significantly exceed the amount invested.
[Where applicable:] [Element E] [Other risks materially relevant to the PRIIP not included in the summary risk indicator to be explained with a maximum of 200 characters]
[Where applicable:] [Element F] [You are entitled to receive back at least [insert %] of your capital. Any amount over this, and any additional return, depends on future market performance and is uncertain.]
[Where applicable:] [Element G] [However, this protection against future market performance will not apply if you [..]
—
[Where early exit conditions apply] cash-in before [… years/months/days]]
—
[Where ongoing payments must be made] fail to make your payments in time.
—
[Where other limitations apply: explain these in a maximum of […] characters in plain language.]
[Where applicable:] [Element H] [This product does not include any protection from future market performance so you could lose some or all of your investment.]
[Where applicable:] [Element I] [If (we) (are) not able to pay you what is owed, you could lose your entire investment.]
[Where applicable:] [Element J] [However, you may benefit from a consumer protection scheme (see the section ‘what happens if we are unable to pay you’). The indicator shown above does not consider this protection.]# Table 1 in anx_I
| Key Information Document |
|---|
| PurposeThis document provides you with key information about this investment product. It is not marketing material. The information is required by law to help you understand the nature, risks, costs, potential gains and losses of this product and to help you compare it with other products. |
| Product[Name of Product][Name of PRIIP manufacturer](where applicable)[ISIN or UPI][website for PRIIP manufacturer][Call [telephone number] for more information][[Name of Competent Authority] is responsible for supervising [Name of PRIIP Manufacturer] in relation to this Key Information Document](where applicable)[This PRIIP is authorised in [name of Member State]](where applicable)[[Name of UCITS management company] is authorised in [name of Member State] and regulated by [identity of competent authority](where applicable)[Name of AIFM] is authorised in [name of Member State] and regulated by [identity of competent authority][date of production of the KID] |
| [Alert (where applicable)You are about to purchase a product that is not simple and may be difficult to understand] |
| What is this product?TypeTermObjectivesIntended retail investor[Insurance benefits and costs] |
| What are the risks and what could I get in return? |
| Risk |
| Indicator |
| Performance |
| Scenarios |
| What happens if [PRIIP manufacturer] is unable to pay out?Information on whether there is a guarantee scheme, the name of the guarantor or investor compensation scheme operator, including the risks covered and those not covered. |
| What are the costs?Narratives on information to be included on other distribution costs |
| Costs over Time |
| Composition of Costs |
| How long should I hold it and can I take money out early? |
| Recommended [required minimum] holding period: [x] |
| Information on whether one can disinvest before maturity, the conditions for this, and applicable fees and penalties if any. Information on the consequences of cashing-in before the end of the term or before the end of the recommended holding period. |
| How can I complain? |
| Other relevant informationWhere applicable a short description of the information published on past performance |
Table 1 in anx_II
| MRM class | VaR-equivalent volatility (VEV) |
|---|---|
| 1 | < 0,5 % |
| 2 | ≥ 0,5 % and < 5,0 % |
| 3 | ≥ 5,0 % and < 12 % |
| 4 | ≥ 12 % and < 20 % |
| 5 | ≥ 20 % and < 30 % |
| 6 | ≥ 30 % and < 80 % |
| 7 | ≥ 80 % |
Table 2 in anx_II
| Credit quality step pursuant to point 38 of this Annex | Adjusted credit quality step, in the case where the maturity of the PRIIP, or its recommended holding period where a PRIIP does not have a maturity, is up to one year | Adjusted credit quality step, in the case where the maturity of the PRIIP, or its recommended holding period where a PRIIP does not have a maturity, ranges from one year up to 12 years | Adjusted credit quality step, in the case where the maturity of the PRIIP, or its recommended holding period where a PRIIP does not have a maturity, exceeds 12 years |
|---|---|---|---|
| 0 | 0 | 0 | 0 |
| 1 | 1 | 1 | 1 |
| 2 | 1 | 2 | 2 |
| 3 | 2 | 3 | 3 |
| 4 | 3 | 4 | 5 |
| 5 | 4 | 5 | 6 |
| 6 | 6 | 6 | 6 |
Table 3 in anx_II
| Adjusted credit quality step | Credit risk measure |
|---|---|
| 0 | 1 |
| 1 | 1 |
| 2 | 2 |
| 3 | 3 |
| 4 | 4 |
| 5 | 5 |
| 6 | 6 |
Table 4 in anx_II
| MRM classCRM class | MR1 | MR2 | MR3 | MR4 | MR5 | MR6 | MR7 |
|---|---|---|---|---|---|---|---|
| CR1 | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| CR2 | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| CR3 | 3 | 3 | 3 | 4 | 5 | 6 | 7 |
| CR4 | 5 | 5 | 5 | 5 | 5 | 6 | 7 |
| CR5 | 5 | 5 | 5 | 5 | 5 | 6 | 7 |
| CR6 | 6 | 6 | 6 | 6 | 6 | 6 | 7 |
Table 1 in anx_IV
| 1 year | > 1 year | |
|---|---|---|
| Daily prices | 21 | 63 |
| Weekly prices | 8 | 16 |
| Monthly prices | 6 | 12 |
Table 1 in anx_V
| Recommended holding period: | [] |
|---|---|
| Example Investment: | [EUR 10 000 ] |
| (Where applicable)Insurance premium: | [monetary amount] |
| If you [exit] after 1 year | |
| (where applicable) | (where applicable) |
| [Survival] Scenarios | |
| Minimum | [Monetary amount]or[There is no minimum guaranteed return [if you [exit] before […years/months/days]](where applicable). You could lose some or all of your investment [or have to make further payments to cover losses](where applicable)] |
| Stress | What you might get back after costs |
| Average return each year | |
| Unfavourable | What you might get back after costs |
| Average return each year | |
| Moderate | What you might get back after costs |
| Average return each year | |
| Favourable | What you might get back after costs |
| Average return each year | |
| (Where applicable)[Death] Scenario | |
| [Insured event] | What your beneficiaries might get back after costs |
Table 2 in anx_V
| Recommended holding period: | [] |
|---|---|
| Example Investment: | [EUR 1 000 ] per year |
| (Where applicable)Insurance premium: | [monetary amount] per year |
| If you [exit] after 1 year | |
| (where applicable) | (where applicable) |
| [Survival] Scenarios | |
| Minimum | [Monetary amount]or[There is no minimum guaranteed return [if you [exit] before […years/months/days]](where applicable). You could lose some or all of your investment [or have to make further payments to cover losses](where applicable)] |
| Stress | What you might get back after costs |
| Average return each year | |
| Unfavourable | What you might get back after costs |
| Average return each year | |
| Moderate | What you might get back after costs |
| Average return each year | |
| Favourable | What you might get back after costs |
| Average return each year | |
| Amount invested over time | [] EUR |
| (Where applicable)[Death] Scenario | |
| [Insured event] | What your beneficiaries might get back after costs |
| Insurance premium taken over time | [] EUR |
Table 3 in anx_V
| Recommended holding period: | Until the product is called or maturesThis may be different in each scenario and is indicated in the table |
|---|---|
| Example Investment: | [EUR 10 000 ] |
| If you [exit] after 1 year | |
| (where applicable) | (where applicable) |
| Scenarios | |
| Minimum | [Monetary amount]or[There is no minimum guaranteed return [if you [exit] before […years/months/days]](where applicable). You could lose some or all of your investment [or have to make further payments to cover losses](where applicable)] |
| Stress | What you might get back after costs |
| (product ends after []) | Average return each year |
| Unfavourable | What you might get back after costs |
| (product ends after []) | Average return each year |
| Moderate | What you might get back after costs |
| (product ends after []) | Average return each year |
| Favourable | What you might get back after costs |
| (product ends after []) | Average return each year |
Table 1 in anx_VI
| Asset Classes |
|---|
| Government bonds |
| Government bonds and similar instruments developed market different rating below A |
| Government bonds emerging markets (hard and soft currency) |
| Investment grade corporate bonds |
| Other corporate bonds |
Table 2 in anx_VI
| Asset Classes |
|---|
| Liquidity |
| Shares developed markets |
| Mid-cap shares (developed markets) |
| Small-cap shares (developed markets) |
| Shares emerging markets |
| Mid-cap shares (emerging markets) |
| Small-cap shares (emerging markets) |
| Listed derivatives |
Table 3 in anx_VI
| Asset Classes |
|---|
| OTC |
| OTC Plain vanilla options |
| OTC IRS, CDS and similar |
| OTC Swaps and similar instruments (different from IRS, CDS and similar) |
| OTC FX Forwards developed markets |
| OTC FX Forwards emerging markets |
Table 1 in anx_VII
| If you [exit] after 1 year(where applicable) | If you [exit] after [1/2 recommended holding period](where applicable) | If you [exit] after [recommended holding period] | |
|---|---|---|---|
| Total costs | [] EUR | [] EUR | [] EUR |
| Annual cost impact(*1) | [] % | [] % each year | [] % each year |
| (*1)‘This illustrates how costs reduce your return each year over the holding period. For example it shows that if you exit at the recommended holding period your average return per year is projected to be [] % before costs and [] % after costs.’(Where applicable):‘We may share part of the costs with the person selling you the product to cover the services they provide to you.(Where applicable)[They will inform you of the amount].’(Where applicable):‘These figures include the maximum distribution fee that the person selling you the product may charge ([] % of amount invested/[] EUR). This person will inform you of the actual distribution fee.’; |
Table 2 in anx_VII
| If you [exit] after 1 year(where applicable) | If you [exit] after [1/2 recommended holding period](where applicable) | If you [exit] after [recommended holding period] | |
|---|---|---|---|
| Total costs | |||
| — Insurance contract— Investment options | [] EUR[] – [] EUR | [] EUR[] – [] EUR | [] EUR[] – [] EUR |
| Annual cost impact(*1) | |||
| — Insurance contract— investment options | [] %[] – [] % | [] % each year[] – [] % each year | [] % each year[] – [] % each year |
| (*1)‘This illustrates how costs reduce your return each year over the holding period. For example it shows that if you exit at the recommended holding period your average return per year is projected to be [] % before costs and [] % after costs.’(Where applicable):‘We may share part of the costs with the person selling you the product to cover the services they provide to you.(Where applicable)[They will inform you of the amount.]’(Where applicable):‘These figures include the maximum distribution fee that the person selling you the product may charge ([] % of amount invested/[] EUR). This person will inform you of the actual distribution fee.’ |
Table 3 in anx_VII
| If the product is called at the first possible date [] | If the product reaches maturity | |
|---|---|---|
| Total costs | [] EUR | [] EUR |
| Annual cost impact(*1) | [] % | [] % each year |
| (*1)‘This illustrates how costs reduce your return each year over the holding period. For example, it shows that if you exit at maturity your average return per year is projected to be [] % before costs and [] % after costs.’(Where applicable):‘We may share part of the costs with the person selling you the product to cover the services they provide to you.(Where applicable)[They will inform you of the amount.]’(Where applicable):‘These figures include the maximum distribution fee that the person selling you the product may charge ([] % of amount invested/[] EUR). This person will inform you of the actual distribution fee.’ |
Table 4 in anx_VII
| One-off costs upon entry or exit | (PRIPs): If you [exit] after [1 year/recommended holding period(if less than 1 year)](Insurance based investment products): Annual cost impact if you [exit] after [recommended holding period] |
|---|---|
| Entry costs | [Describe nature in no more than 300 characters. Examples:— ‘[] % of the amount you pay in when entering this investment’— ‘[] % of the first [] premiums you pay’— ‘These costs are already included in the [price/premiums] you pay’— ‘This includes distribution costs of [[] % of amount invested/[] EUR]. [This is the most you will be charged]. [The person selling you the product will inform you of the actual charge]’— ‘We do not charge an entry fee’] |
| Exit costs | [Describe nature in no more than 300 characters. Examples:— ‘[] % of your investment before it is paid out to you’— ‘We do not charge an exit fee for this product, [but the person selling you the product may do so]’(Where exit costs only apply in specific circumstances)– ‘These costs only apply if(explain circumstances or an example in maximum 200 characters)’For insurance-based investment products where exit costs only apply before exit at the recommended holding period, the column to the right shall state ‘N/A’ and the following statement shall be included in this column in addition to the descriptions above: ‘Exit costs are stated as ‘N/A’ in the next column as they do not apply if you keep the product until the recommended holding period’ |
| Ongoing costs [taken each year] | |
| Management fees and other administrative or operating costs | [Describe basis in no more than 150 characters. Example:‘[] % of the value of your investment per year’].This is an estimate based on actual costs over the last year. |
| Transaction costs | [] % of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the underlying investments for the product. The actual amount will vary depending on how much we buy and sell. |
| Incidental costs taken under specific conditions | |
| Performance fees [and carried interest] | [[Describe in no more than 300 characters]. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years.] or [There is no performance fee for this product]. |
| (Where applicable):‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’ |
Table 5 in anx_VII
| One-off costs upon entry or exit | Annual cost impact if you [exit] after [recommended holding period] |
|---|---|
| Entry costs | [Describe nature in no more than 300 characters. Examples:— ‘[] % of the amount you pay in when entering this investment’— ‘[] % of the first [] premiums you pay’— ‘These costs are already included in the [price/premiums] you pay’— ‘This includes distribution costs of [[] % of amount invested/[] EUR]. [This is the most you will be charged]. [The person sellingyou the product will inform you of the actual charge]’— ‘We do not charge an entry fee’] |
| Exit costs | [Describe nature in no more than 300 characters. Examples:— ‘[] % of your investment before it is paid out to you’.— ‘We do not charge an exit fee for this product, [but the person selling you the product may do so]’.(Where exit costs only apply in specific circumstances)– ‘These costs only apply if(explain circumstances or an example in maximum 200 characters)’For insurance-based investment products where exit costs only apply before exit at the recommended holding period, the column to the right shall state ‘N/A’ and the following statement shall be included in this column in addition to the descriptions above: ‘Exit costs are stated as ‘N/A’ in the next column as they do not apply if you keep the product until the recommended holding period.’ |
| Ongoing costs taken each year | |
| Management fees and other administrative or operating costs | [Describe basis in no more than 150 characters. Example:‘[] % of the value of your investment per year’].This is an estimate based on actual costs over the last year. |
| Transaction costs | [] % of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the underlying investments for the product. The actual amount will vary depending on how much we buy and sell. |
| Incidental costs taken under specific conditions | |
| Performance fees [and carried interest] | [[Describe in no more than 300 characters]. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years.] or [There is no performance fee for this product]. |
| (Where applicable): ‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’’ |