Article 8(3)(d) of the Regulation requires the section "What are the risks and what could I get in return?" of the KID to include a summary risk indicator and a narrative explanation of it1. The 2017 technical standards treat 1 as the lowest and 7 as the highest risk class2. The number is set from a table that combines the market risk class and the credit risk class3.

Consider a hypothetical example in which the table of the technical standards is applied to a product with market risk class 4 and credit risk class 3. The SRI is 4. The SRI is a guide to the risk of its class and is not a number that shows gains or losses.

Notes

  1. Regulation (EU) No 1286/2014 Article 8(3)(d)(i) (adopted version on legislation.gov.uk). ↩

  2. Commission Delegated Regulation (EU) 2017/653 Article 3(2)(a) and Annex III point 7, Element B (adopted version on legislation.gov.uk). ↩

  3. Commission Delegated Regulation (EU) 2017/653 Annex II Part 3 point 52 (adopted version on legislation.gov.uk). ↩