The update includes the following clarifications
- Products open to subscription include products that can be purchased directly from the product manufacturer or on the secondary market. They are expected to review and update their KIDs during the life of the product.
- The benchmark defined for an investment fund, for example for the purpose of calculating a performance fee, should be used for the calculation of the SRI and scenarios, but only if appropriate. If that is not the case, other indices or a similar fund track can be used instead
- A proxy can be recreated for the calculation of the SRI/scenarios as long as it is based on verifiable market prices and a simple model.
- It is possible to use benchmark/proxy data to supplement a product’s history up to 5 years for the calculation of the SRI.
- Cross-references can be used in the KID to avoid unnecessary repetitions.
- The section ‘How long should I hold it and can I take money out early?’ is expected to include information about exit fees and liquidity management tools, if any.
- The sub-section ‘Term’ should include a description of all cases where the product manufacturer can redeem either the product as a whole or for a specific investor (e.g. failure to meet a capital call).
- The currency risk disclaimer must be included when the currency of a shareclass is different from the currency of the country in which the product is marketed.
- It is possible for closed-ended products to only disclose scenario results and costs at the RHP.
- The cost disclosed in table 1 (“costs over time”) and table 2 (“total cost”) must be aligned for the holding period shown in table 2.
Read the full document published by ESMA