Money managers under the microscope
By Merieme Boutayeb. Research Analyst at Lipper. The views expressed are her own.
The European fund industry is getting a second chance this week to improve the way it communicates with investors when selling its products. While the first effort became mired in legalese and complexity, the Key Investor Information Document, or KIID, should offer a golden opportunity to recoup some more of the trust lost during and after the financial crisis. Firms would do well to look past their misgivings and not waste it.
The new requirements are part of the broader changes that come as part of UCITS IV regulations designed to further develop a single market in investment products. The KIID will replace the much-criticised Simplified Prospectus as the means to facilitate the understanding of neophyte investors.
Published by ESMA (the European Securities and Markets Authority, the final KIID layout will be divided into five principal sections: objectives and investment policy; risk and reward profile; charges; past performance; practical information.