MiFID II & PRIIPs
2018 heralds the implementation of MiFID II and PRIIPs. This bulletin summarises our current position regarding a range of areas affected by these new regulations.
Key Information Documents
These will now be available for all Plans and can be found on the literature page for each Plan.
We will be using the KIDs produced by each Issuer and have amended the brochures to make reference to the document. We haven't seen the final documents from all Issuers but from what we have seen to date it’s clear that the terminology in each will be slightly different, which makes it even more important that our brochures are clear and give a full explanation of the product features. The main changes are listed in the 'Brochure Update' section below and we're sure these will be subject to changes during the early stages of the regime.
Click here to view the FCA's PRIIPs disclosure on KIDs.
Legal Entity Identifiers
The need for LEIs has continued to be contentious across Europe and as evidence that confusion is reigning, ESMA has announced a 6-month transition period, from 3 January 2018, during which time we can accept applications and sale instructions from corporate entities which do not have an LEI, as long as we have confirmation one is being applied for.
For clarification, an LEI isn’t needed for existing business – until maturity or earlier encashment or re-registration.
Click here for more information on LEIs.
Target Market identification
It's almost 3 years ago since we introduced the 'Is the Plan right for me?' page of the brochure, to set out the type of investor for whom a plan's profile might be suitable. Target Market identification is a key part of the MiFID Product Governance requirements and in light of this, we have updated this section of the brochure to cover in more detail the knowledge and experience of a retail investor and their high level investment objectives; obviously intermediaries will be able to assess this at client specific level as they give investment advice.
The categories of retail investor that we describe are taken from ESMA guidance. Please note that taking financial advice can change the categorisation of someone who might have otherwise been a ‘Basic investor’ to an ‘Informed Investor’.
Click here to read the ESMA final guidance report.
In addition to simplifying some of the text, we have made the following key changes:-
- Has a new section signposting readers to the Key Information Document (KID).
- The Securities section references the name of the Note/Certificate, as well as the linking to any Preference Share,
- The costs and charges section references the KID.
- Has been removed as the information is now contained in the KID.
- Corporate entities are asked for an LEI – the transition period means we can continue to take business if there isn’t one, as long as the intermediary can confirm that they have the information to obtain an LEI on their client’s behalf.