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FE Whitepaper

Preparing for your Client Reporting Obligations under PRIIPs and MiFID II

The investment industry across Europe is preparing for the introduction of two major pieces of legislation at the start of 2018 that share many features, but also have a number of key differences.  

The Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and the second Markets in Financial Instruments Directive (MiFID II) both became laws in 2014. Both were meant to come into force by the start of 2017, but were both, independently, delayed by a year.

As the name suggests, PRIIPs deals with packaged investment products available to retail clients and it brings in a prescribed, generic, pre-sale Key Information Document (KID).  The KID is similar in principle to the Key Investor Information Document (KIID) that every UCITS fund has produced and maintained since 2012, namely a summary of the important information that clients need to know before investing.

MiFID II is concerned with the transparency of services around funds and portfolios, including distribution, portfolio management services, trading venues, best execution and the investment research used by asset managers.  Much of this will require sophisticated systems to record the information to show that investment professionals are acting in the best interests of their clients.

The scope of MiFID II is therefore much wider than PRIIPs.  This paper deals with the client-facing aspects of both PRIIPs and MiFID II, as these require the sharing of large amounts of data between the parties involved in the management and distribution of investment products.

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