The KIID is made of: Title, Management Company details, Objective and Investment Policy, Risk and Reward profile, Charges, Past Performance and Practical Information including Authorisation details. For structured funds, the Past Performance section is not applicable but the Management Company must include, in the Investment Policy section, three performance scenario; favorable, unfavorable and medium scenarios. From this one can derive certain challenges, which include:
- Consistency between the various publications (prospectus, KIID, website, fact sheets, etc.)
- Review of distribution contracts
- Synthetic Risk and Reward Indicator, “SRRI”, calculation
- Quality assurance over the final deliverable
- Sheer volume (funds, sub funds, share classes, several languages)
- Updating of KIIDs pre material changes
- Updating of KIIDs 35 business days after 31 December each year to update past performance
- KIID must be written in plain language
- KIID must not exceed 2 A4 pages (3 A4 pages for structured funds)
- Translations, considering both “plain language” constraints and length constraints.
As a consequence of the KIID regulations, KPMG has decided to strategically position itself as a leading provider in this area. Various capabilities and expertise have been developed (SRRI, simulation of past performance, production models, country specific requirements). KPMG also has an IT system which allows for the full automation of the KIID production. In short KPMG provides for the full outsourcing of the KIID production and compilation.
Management companies may have to revise their internal organisations in order to manage the KIID requirements and to ensure consistency between the other funds documentation (prospectus, fact sheet, marketing material, etc). The KIID production will also require scalable teams, such as at the beginning of the calendar year for the update of all KIIDs. Due to these various reasons, amongst others, large numbers of Management Companies are looking for an outsourced solution for to meet their specific needs. KPMG has developed a fully outsourced which includes various added value services and a compilation report, ISRS 4410, that can be disclosed to third parties.
For more information, please contact: