ESMA_QA_1821
Status: ✅ Answer Published
Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/1821
Regulatory Context
Regulation : MIF2
Level 1 Regulation: Markets in Financial Instruments Directive II (MiFID II) Directive 2014/65/EU- Investor Protection and Intermediaries
Level 2 Regulation: No information available
Level 3 Regulation: No information available
Topic: Information to clients on costs and charges
Subject Matter: Post-sale reporting
Question
Submission Date: 06 June 2017
What steps should an investment firm take when calculating the costs of products that fall within the PRIIPS transition period, like UCITS during the 3 January 2018 to 31 December 2019 period?
ESMA Answer
Answer Date: 06-06-2017
[ESMA 35-43-349 MiFID II Q&AS on Investor protection Ch. 9, question 10] UCITS do not have to provide a PRIIPs KID until 31 December 2019 and until that moment are only obliged to comply with the requirement to provide a Key Investor Document under the UCITS IV directive (2009/65/65). Based on Article 32(2) of the PRIIPs Regulation, and depending on the Member State, this exemption can apply to other non-UCITS funds (e.g. AIFs). While the UCITS KIID provides information on the costs and charges of UCITS (or non-UCITS, when applicable) with regard to ongoing charges (e.g. management fees), one-off charges (e.g. entry and exit charges) and incidental charges (e.g. performance fees), not all costs items are included therein. For instance, the UCITS KIID does not include information on the transaction costs a UCITS incurs when trading. An investment firm should however disclose all costs, including all costs of the financial instruments. Therefore, where for instance the information on transaction costs, which would be expected to be calculated using the methodology referred to in the PRIIPs RTS, is not publicly available the investment firm would be expected to liaise with the UCITS manager (and, where applicable, the manager of a non-UCITS fund) to obtain it. During this transition period, transaction costs might be assessed by using the method provided for in paragraphs 21 to 23 of Annex VI of the PRIIPs RTS.
This document was automatically extracted from the ESMA EMIR Q&A database.