LegalizeCommission Delegated Regulation (EU) 2021/2268 of 6 September 2021 amending the regulatory technical standards laid down in Commission Delegated Regulation (EU) 2017/653 as regards the underpinning methodology and presentation of performance scenarios, the presentation of costs and the methodology for the calculation of summary cost indicators, the presentation and content of information on past performance and the presentation of costs by packaged retail and insurance-based investment products (PRIIPs) offering a range of options for investment and alignment of the transitional arrangement for PRIIP manufacturers offering units of funds referred to in Article 32 of Regulation (EU) No 1286/2014 of the European Parliament and of the Council as underlying investment options with the prolonged transitional arrangement laid down in that Article (Text with EEA relevance)
In the cost tables set out below, the term “exit” shall be used to represent the end of the investment. Where that term might be misleading for specific types of PRIIPs, an alternative term may be used, such as “terminate” or “surrender”.
Table 1 for all PRIIPs except those referred to in Article 13, point (b) and in point 76c of Annex VI (autocallables)
The PRIIP manufacturer shall include the following headings, narratives and the table 1 showing the aggregated cost figures in monetary and percentage terms specified in points 61 and 62 of Annex VI with the holding periods referred to in point 90 of that Annex:
“
Costs over time
The tables show the amounts that are taken from your investment to cover different types of costs. These amounts depend on how much you invest, how long you hold the product [and how well the product does (where applicable)]. The amounts shown here are illustrations based on an example investment amount and different possible investment periods.
We have assumed:
— [In the first year] you would get back the amount that you invested (0 % annual return). [For the other holding periods we have assumed the product performs as shown in the moderate scenario]
— [EUR 10 000 /1 000 per year] is invested”
| 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 1 for PRIIPs referred to in point (b) of Article 13
The PRIIP manufacturer shall include the following headings, narratives and the table 1 showing the aggregated cost figures in monetary and percentage terms specified in points 61 and 62 of Annex VI with the holding periods referred to in point 90 of that Annex and providing a split between the costs of the PRIIP other than the costs of the underlying investment options (“insurance contract”) and the range of costs of the underlying investment options (“investment options”):
“
Costs over time
The tables show the amounts that are taken from your investment to cover different types of costs. These amounts depend on how much you invest, how long you hold the product [and how well the product does (where applicable)]. The amounts shown here are illustrations based on an example investment amount and different possible investment periods.
We have assumed:
— In the first year you would get back the amount that you invested (0 % annual return). For the other holding periods we have assumed the product performs as shown in the moderate scenario
— [EUR 10 000 /1 000 per year] is invested
[Statement indicating that the total costs to the retail investor consist of a combination of the costs of the PRIIP other than the costs of the underlying investment options and the investment option costs and vary on the basis of the underlying investment options]”
| 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 1 for PRIIPs referred to in point 76c of Annex VI (Autocallables)
For PRIIPs referred to in point 76c of Annex VI, the heading, narrative and table 1 “Costs over Time” shall be the following:
“
Costs over time
The tables show the amounts that are taken from your investment to cover different types of costs. These amounts depend on how much you invest, how long you hold the product [and how well the product does (where applicable)]. The amounts shown here are illustrations based on an example investment amount and different investment periods.
The duration of this product is uncertain as it may terminate at different times depending on how the market evolves. The amounts shown here consider two different scenarios (early call and maturity). In case you decide to exit before the product ends, exit costs may apply in addition to the amounts shown here.
We have assumed:
— [EUR 10 000 /1 000 per year] is invested
— a performance of the product that is consistent with each holding period shown.”
| 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 2 for all PRIIPs except those referred to in point (b) of Article 13
The PRIIP manufacturer shall include a breakdown of costs according to the classification referred to in points 64 to 69 of Annex VI, using the headings and table 2 below.
A very brief description of the nature of each type of the costs shall be included. This shall include a numeric indicator (monetary amount or percentage) and the basis used for the calculation where this can be presented in simple terms that are likely to be understood by the type of retail investor to whom the PRIIP is intended to be marketed. The description shall be based on one or more of the examples included in the table below, unless these are not applicable.
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Composition of Costs
| 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”] | [Up to] [] EUR (PRIPs) or [] % (IBIPs) |
| 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” | [] EUR (PRIPs) or [] % (IBIPs) |
| 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. | [] EUR (PRIPs) or [] % (IBIPs) |
| 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. | [] EUR (PRIP) or [] % (IBIPs) |
| 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]. | [] EUR (PRIP) or [] % (IBIPs) |
| (Where applicable): “Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]” |
For PRIIPs offering a range of options for investment, PRIIP manufacturers shall use the tables 1 and 2 of this Annex applying to all PRIIPs except those referred to in Article 13, point (b) and point 76c of Annex VI for the presentation of the costs, showing for the figures in each table, as relevant, the range of the costs.
For PRIIPs with a recommended holding period of less than one year, instead of “Annual cost impact”, the label of the cost ratio in percentage terms in tables 1 and 2 shall be “Cost impact” and the footnote under the table 1 shall state the following “This illustrates the effect of costs over a holding period of less than one year. This percentage cannot be directly compared to the cost impact figures provided for other PRIIPs”.
For PRIIPs where cost ratios in percentage are calculated using the notional value the following footnote shall be added below the table: “This illustrates costs in relation to the notional value of the PRIIP”.”
Table 2 for PRIIPs referred to in point (b) of Article 13
The PRIIP manufacturer shall include a breakdown of costs according to the classification referred to in points 64 to 69 of Annex VI, using the headings and table 2 below. Where applicable for the type of cost, a split of costs shall be shown between the costs of the PRIIP other than the costs of the underlying investment options (“insurance contract”) and the range of costs of the investment options (“investment options”).
A very brief description of the nature of each type of the costs shall be included. This shall include a numeric indicator (fixed amount or percentage) and the basis used for the calculation where this can be presented in simple terms that are likely to be understood by the type of retail investor to whom the PRIIP is intended to be marketed. The description shall be based on one or more of the examples included in the table below, unless these are not applicable.
“
Composition of Costs
| 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”] | “[] %” or “Insurance contract [] % Investment option [] – [] %” |
| 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.” | “[] %” or “Insurance contract [] % Investment option [] – [] %” |
| 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. | “[] %” or “Insurance contract [] % Investment option [] – [] %” |
| 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. | “[] %” or “Insurance contract [] % Investment option [] – [] %” |
| 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]. | “[] %” or “Insurance contract [] % Investment option [] – [] %” |
| (Where applicable): “Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]”” |
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ANNEX VIII
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ANNEX VIII
CONTENT AND PRESENTATION OF PAST PERFORMANCE INFORMATION
Definitions
1.For the purpose of presenting information on past performance the following definitions shall apply:
(a) “UCITS” means a UCITS authorised in accordance with Article 5 of Directive 2009/65/EC which: (i) is a Category 2 PRIIP as set out in point 5 of Annex II; and (ii) does not provide retail investors, at certain predetermined dates, with algorithm-based payoffs that are linked to the performance, or to the realisation of price changes or other conditions, of financial assets, indices or reference portfolios or have similar features;
(b) “AIF” means an AIF as defined in Article 4(1), point (a) of Directive 2011/61/EU which: (i) is a Category 2 PRIIP as set out in point 5 of Annex II; (ii) is an open-ended AIF as referred to in Article 1(2) of Commission Delegated Regulation (EU) No 694/2014 (2); and (iii) does not provide retail investors, at certain predetermined dates, with algorithm-based payoffs that are linked to the performance, or to the realisation of price changes or other conditions, of financial assets, indices or reference portfolios or have similar features;
(c) “unit-linked insurance-based investment product” means a unit-linked insurance- based investment product which: (i) is a Category 2 PRIIP as set out in point 5 of Annex II; (ii) has potential early exit or redemption possibilities prior to the recommended holding period, which are not subject to significant limiting conditions; (iii) provides benefits that are directly linked to the value of assets which are divided into units; and (iv) does not provide retail investors, at certain predetermined dates, with algorithm-based payoffs that are linked to the performance, or to the realisation of price changes or other conditions, of financial assets, indices or reference portfolios or have similar features.
Past performance calculation for UCITS or AIFs
2.The calculation of past performance figures shall be based on the net asset value of the UCITS or AIFs, and they shall be calculated on the basis that any distributable income of the fund has been reinvested.
Use of “simulated” data for past performance for UCITS or AIFs
3.A simulated performance record for the period before data was available shall only be permitted in the following cases, provided that its use is fair, clear and not misleading:
(a) a new share class of an existing UCITS or AIF or investment compartment may simulate its performance by taking the performance of another class, provided the two classes do not differ materially in the extent of their participation in the assets of the UCITS or the AIF;
(b) a feeder UCITS or AIF may simulate its performance by taking the performance of its master UCITS or AIF, provided that one of the following conditions is met; (i) the feeder UCITS or AIF’s strategy and objectives do not allow it to hold assets other than units of the master UCITS or AIF and ancillary liquid assets; (ii) the feeder UCITS or AIF’s characteristics do not differ materially from those of the master UCITS or AIF.
Past performance calculation for unit-linked insurance-based investment products
4.The calculation of past performance as described in point 2 of this Annex shall apply mutatis mutandis to unit-linked insurance-based investment products. The calculation shall be consistent either with the explanation of the impact of the biometric risk premium or the cost part of the biometric risk premium on the investment return as referred to in Article 2(4).
Presentation of past performance for UCITS or AIFs
5.The information about the past performance of the UCITS or the AIF shall be presented in a bar chart covering the performance of the UCITS or the AIF for the last 10 years. The size of the bar chart shall allow for legibility.
6.UCITS or AIFs with performance of less than five complete calendar years shall use a presentation covering the last five years only.
7.Any year for which data is not available shall be shown as blank with no annotation other than the date.
8.For UCITS or AIFs which do not yet have performance data for one complete calendar year, a statement shall be included explaining that there is insufficient data to provide a useful indication of past performance to retail investors.
9.The bar chart layout shall be supplemented by the following statements, which shall appear prominently:
(a) a warning about the limited value of past performance as a guide to future performance, using the following statement in bold letters: “ Past performance is not a reliable indicator of future performance. Markets could develop very differently in the future. It can help you to assess how the fund has been managed in the past ”;
(b) a narrative explaining what is shown which shall be included above the bar chart and shall state in bold letters: “ This chart shows the fund’s performance as the percentage loss or gain per year over the last [x] years. ”;
(c) if applicable, a product specific warning about the lack of representativeness of the past in accordance with point 15 of this Annex or if relevant other reasons with a maximum of 150 characters in plain language;
(d) a brief explanation of which charges and fees have been included or excluded from the calculation of past performance where relevant. This shall not apply to UCITS or AIFs which do not have entry or exit charges. [An example narrative: “ Performance is shown after deduction of ongoing charges. Any entry and exit charges are excluded from the calculation. ”];
(e) an indication of the year in which the fund, compartment or share class came into existence;
(f) if relevant an indication of the currency in which past performance has been calculated.
10.The information shall not contain any record of past performance for any part of the current calendar year.
Use of a benchmark alongside the past performance
11.Where the section entitled “What is this product?” of the key information document makes reference to a benchmark, a bar showing the performance of that benchmark shall be included in the chart alongside each bar showing past performance of the UCITS or the AIFs. This applies for UCITS or AIFs tracking a benchmark as well as for those managed in reference to a benchmark. A UCITS or AIF is deemed to be managed in reference to a benchmark, where the benchmark index plays a role in the management of the UCITS or AIF, such as for portfolio composition and/or performance measures.
12.For UCITS or AIFs which do not have past performance data over the required five or 10 years, the benchmark shall not be shown for years in which the UCITS or AIF did not exist.
13.If the UCITS or AIF is managed in reference to a benchmark as referred to in point 11 of this Annex, the narratives in point 9 of this Annex shall be supplemented as follows in bold letters:
“ This chart shows the fund’s performance as the percentage loss or gain per year over the last [] years against its benchmark. ”
“ It can help you to assess how the fund has been managed in the past and compare it to its benchmark. ”
Presentation of the bar chart
14.The bar chart presenting past performance shall comply with the following criteria:
(a) the scale of the Y-axis of the bar chart shall be linear, not logarithmic;
(b) the scale shall be adapted to the span of the bars shown and shall not compress the bars so as to make fluctuations in returns harder to distinguish;
(c) the X-axis shall be set at the level of 0 % performance;
(d) a label shall be added to each bar indicating the return in percentage that was achieved;
(e) past performance figures shall be rounded to one decimal place.
Impact and treatment of material changes
15.Where a material change occurs in the UCITS’ or AIF’s objectives and investment policy during the period displayed in the bar chart referred to in points 5 to 10 of this Annex, the UCITS’ or AIF’s past performance prior to that material change shall continue to be shown.
16.The period prior to the material change referred to in point 15 of this Annex shall be indicated on the bar chart and labelled with a clear warning that the performance was achieved under circumstances that no longer apply.
Use of “simulated” data for past performance
17.In all cases where performance has been simulated in accordance with point 3 of this Annex, there shall be prominent disclosure on the bar chart that the performance has been simulated.
18.A UCITS or AIF changing its legal status but remaining established in the same Member State shall retain its performance record only where the competent authority of that Member State reasonably assesses that the change of status would not impact the UCITS’ or AIF’s performance.
19.In the case of mergers referred to in Article 2(1), points (p)(i) and (iii),) of Directive 2009/65/EC, only the past performance of the receiving UCITS shall be maintained.
20.Point 19 of this Annex shall apply mutatis mutandis in the case of mergers of AIFs.
Presentation of past performance of feeder UCITS or AIFs
21.The past performance presentation of feeder UCITS or AIF shall be specific to the feeder UCITS or AIF, and shall not reproduce the performance record of the master UCITS or AIF.
22.Point 21 of this Annex shall not apply where:
(a) the feeder UCITS or AIF shows the past performance of its master UCITS or AIF as a benchmark; or
(b) the feeder was launched as a feeder UCITS or AIF at a later date than the master UCITS or AIF, and where the conditions of point 3 of this Annex are satisfied, and where a simulated performance is shown for the years before the feeder existed, based on the past performance of the master UCITS or AIF; or
(c) the feeder UCITS has a past performance record from before the date on which it began to operate as a feeder, its own record being retained in the bar chart for the relevant years, with the material change labelled as required by point 16 of this Annex.
Presentation of past performance of unit-linked insurance-based investment products
23.Points 5 to 16 of this Annex shall apply mutatis mutandis to unit-linked insurance-based investment products. The presentation shall be consistent either with the description of the impact of the biometric risk premium or the cost part of the biometric risk premium on the investment return referred to in Article 2(4).
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