A company that offers structured notes or structured deposits to retail investors draws up and publishes a key information document (KID) under the PRIIPs Regulation. A seller gives the KID to the investor before the contract.

What the Regulation requires

The PRIIPs (packaged retail and insurance-based investment products) Regulation standardizes the format and content of the key information document and requires it to be provided. Its aim is to let retail investors understand the main features and risks of a product and compare it with other products1. This kind of product comes between the retail investor and the market and packages assets, creating price movements, features, and costs that differ from holding the assets directly. The Regulation's view is that information that lets investors compare ways of packaging an investment is therefore needed separately2.

What is required differs between manufacturers and sellers. The manufacturer of a product draws up a key information document (KID) before the product is made available to retail investors and publishes it on its website. A person advising on or selling the product gives the retail investor the KID in good time before the investor is bound by a contract or offer3.

The PRIIPs Regulation complements the distribution measures in MiFID II4. Its core is the format, content, and provision of the KID, and it also sets out civil liability, market monitoring and prohibitions on distribution, and sanctions. The distribution measures in MiFID II are covered in MiFID II and MiFIR.

The legal basis is Regulation (EU) No 1286/2014 of the European Parliament and of the Council, dated November 26, 2014. An EU "regulation" is binding in its entirety and directly applicable in all member states5. The Regulation has six chapters6.

Chapter Content Articles
I Subject matter, scope, and definitions Articles 1 to 4
II Drawing up, format and content, and provision of the KID Articles 5 to 14
III Monitoring of the market for insurance-based investment products, and prohibitions or restrictions on distribution Articles 15 to 18
IV Complaints, redress, cooperation between authorities, and supervision Articles 19 to 21
V Administrative sanctions and measures Articles 22 to 29
VI Final provisions (delegation, UCITS transitional provision, review, and entry into force) Articles 30 to 34

The three European Supervisory Authorities (ESAs) are the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA). Who is responsible for what is as follows.

Matter Responsible party Basis
Technical standards on the format and content of the KID, how to present risk and performance, and how to calculate costs The ESAs draw up the draft through the Joint Committee, and the European Commission adopts it Article 8(5)7
Supervision of compliance and sanctions Competent authorities designated by member states Articles 4(8), 20(2), and 24(2)8
Monitoring of the market for insurance-based investment products, and temporary prohibitions or restrictions on distribution EIOPA and competent authorities Articles 15 to 179

The technical standards for the KID are Commission Delegated Regulation (EU) 2017/653 of March 8, 2017. That Regulation was amended by Commission Delegated Regulation (EU) 2021/2268. The amendment changes, among other things, how performance scenarios and costs are presented. According to the ESMA publication of June 24, 2022, a Commission statement indicated the intention that the new rules apply from January 1, 2023. On June 24, 2022, the European Commission published in the Official Journal Delegated Regulation (EU) 2022/975, which postpones the application date of certain PRIIPs-related disclosures to January 1, 202310.

The Regulation's articles were checked against the versions published as of October 12, 2026 (the text as adopted for the EU Regulation and the technical standards, and the version as of November 22, 2024 for the UK).

Products and persons in scope

The Regulation applies to manufacturers of PRIIPs and to persons advising on or selling PRIIPs11. Manufacturers include not only those who create a product but also those who change the risk and reward profile or the costs of an existing product. A seller is a person who offers or concludes a contract for a product with a retail investor12.

There are two kinds of PRIIP. One is an investment, whatever its legal form, where the amount repayable to the retail investor changes with reference values or with the performance of assets the investor does not buy directly. The other is an insurance product whose maturity or surrender value is wholly or partly exposed to market fluctuations13. Investment funds, life insurance policies with an investment element, structured products, and structured deposits are examples2. A structured note that embeds derivatives falls within this definition when the amount repayable changes with a reference value. The products themselves are covered in What Are Structured Products?.

Assets held directly, such as shares in a company or sovereign bonds, are not PRIIPs. Funds for institutional investors are outside the scope because they are not sold to retail investors14. The exemptions listed in the Regulation are as follows15.

Exemption Content
Non-life insurance Insurance products listed in Annex I to Directive 2009/138/EC
Life insurance that pays out only on death or incapacity Benefits payable only in the event of death, or of incapacity due to injury, illness, or infirmity
Deposits Deposits other than structured deposits
Certain securities Securities listed in Article 1(2), points (b) to (g), (i), and (j), of Directive 2003/71/EC
Pension products Products recognized under national law as having the primary purpose of providing retirement income, officially recognized occupational pension schemes, and individual pensions for which an employer contribution is required by law and the employer or employee has no choice

A retail investor is a retail client under MiFID II. It also includes a customer under Directive 2002/92/EC on insurance mediation who is not a professional client under MiFID II16.

The conditions so far are lined up in the order of the questions in Figure 1.

YesNoDoes the amount receiveddepend on a referencevalue or on assets notbought directly?Not within thePRIIPdefinitionNoYesIs it an exempt product,such as non-lifeinsurance?ExemptYesNoIs it advised or sold toretail investors?Not covered bytheRegulationMay be a PRIIP
Figure 1Determining whether a product may be a PRIIP
Figure description

The three questions check, in order, whether the product meets the PRIIP definition, whether it is an exempt product, and whether it is aimed at retail investors. Directly held shares or sovereign bonds drop out at the first question, non-life insurance or deposits other than structured deposits at the second (the answer is "Yes"), and funds for institutional investors at the third. A product that passes all three may be a PRIIP.

Consider a hypothetical example in which Bank F offers two products to retail investors.

  • Bank F offers a bond whose amount payable at maturity changes with the value of a particular stock index. The amount payable changes with a reference value, and the bond is sold to retail investors. If it does not fall under the exemption table, it passes all three questions in Figure 1 and may be a PRIIP. In that case, the Regulation requires the manufacturer to draw up and publish a KID and the seller to provide it before the contract.
  • Bank F offers an ordinary deposit, not a structured deposit, that pays principal and interest at a fixed rate. The amount payable does not change with a reference value, so the deposit drops out at the first question of Figure 1. Even if there were a deposit whose amount changes with a reference value, a deposit other than a structured deposit falls under the exemption table and drops out at the second question.

The KID and the duties of manufacturers and sellers

Format and content of the KID

The KID is pre-contractual information. Its content must be accurate, fair, clear, and not misleading, and it must not conflict with the contractual documents, the offering documents, or the terms of the product. It is a stand-alone document, separate from marketing material, and it runs to at most three sides of A4 paper when printed17.

The KID follows a fixed order of headings18. The title at the top is "Key Information Document". Directly below it sits a standard explanatory statement. The statement says that the document is not marketing material and that the information is required by law. It also says the document is meant to help the investor understand the nature, risks, costs, and potential gains and losses of the product and compare it with other products19. If the product is not simple and may be difficult to understand, a warning to that effect (the comprehension alert) is shown20.

Heading (original) What it contains
What is this product? The type of product, its objectives and the means of achieving them, the underlying assets or reference values, the intended retail investor, and the term
What are the risks and what could I get in return? The summary risk indicator, the maximum possible loss, performance scenarios, and conditions or caps on returns
What happens if [manufacturer] is unable to pay out? Whether an investor compensation or guarantee scheme covers the loss if the manufacturer cannot pay out
What are the costs? Total costs, including one-off and ongoing costs, in monetary and percentage terms
How long should I hold it and can I take money out early? The recommended holding period, the minimum required holding period where relevant, and the conditions and costs of early disinvestment
How can I complain? How to file a complaint about the product or the conduct of the manufacturer or seller
Other relevant information Additional documents given before and after the contract

The name of the product, the identity and contact details of the manufacturer, the competent authority of the manufacturer, and the date of the document appear at the top21.

What manufacturers and sellers must do

Who What is required Basis
Manufacturer Draw up the KID before the product is made available to retail investors, and publish it on its website Article 5(1)
Manufacturer Review the information in the KID regularly, revise it where necessary, and make the revised version available without delay Article 10(1)
Manufacturer and seller Put in place effective ways for retail investors to complain to the manufacturer, substantive replies to complaints about the KID, and procedures for redress in cross-border disputes Article 19
Seller Provide the KID in good time before the retail investor is bound by a contract or offer Article 13(1)
Seller Provide the KID free of charge, on paper, on another durable medium, or on a website Article 14(1) and (2)
No addressee stated Do not put statements in marketing material that contradict the KID or diminish its significance, and indicate that a KID exists and where to get it Article 9

Media other than paper are subject to conditions. In face-to-face dealings, paper is the default unless the investor asks for another medium22.

The cases in which a KID may be provided after the contract are limited. A seller may provide the KID without undue delay after the transaction only when all of the following conditions are met23.

The retail investor chose to contact the seller and conclude the contract by a means of distance communication. Providing the KID beforehand was not possible. The investor was informed that the transaction could be delayed in order to receive the KID beforehand. The investor agreed to receive it afterward without delaying the transaction.

When the same product is traded repeatedly, the obligation to provide the KID is limited to the first transaction and the first transaction after the KID is revised. This applies where the investor trades following an instruction the investor gave the seller before the first transaction24.

The Regulation also sets out the manufacturer's liability. A manufacturer cannot incur civil liability solely on the basis of the KID. The exception is where the KID is misleading, inaccurate, or inconsistent with the binding contractual documents or with the requirements on the format and content of the KID. In that case, a retail investor who relied on the KID in making the investment and can show a loss can claim damages in accordance with national law. This obligation cannot be limited or waived by contract terms25.

Sanctions are imposed by the competent authorities of the member states. The authorities must be given at least the following powers. They can prohibit or suspend the marketing of a product, and publish a statement identifying the person responsible and the nature of the infringement. They can also prohibit a KID that does not meet the requirements and require a new version, and impose administrative fines. For legal persons, the Regulation lists three caps side by side: EUR 5 million, 3% of total annual turnover, and twice the amount of the profits gained or losses avoided because of the infringement26. Member states may provide for stricter sanctions or higher fines27.

The summary risk indicator and products that contain derivatives

In the annexes to the technical standards adopted in 2017 (Commission Delegated Regulation (EU) 2017/653), the summary risk indicator (SRI) is a risk class for the product, shown as a number from 1 to 7 in the "risks and what could I get in return" section of the KID. A higher number means a higher risk class28. The class is set from two components, market risk and credit risk.

Market risk class

Market risk is measured by the VaR-equivalent volatility (VEV), which is an annualized volatility equivalent to a value at risk (VaR) at a 97.5% confidence level over the recommended holding period. The VEV is mapped to a market risk class (MRM) using the following table29.

Market risk class (MRM) VEV
1 Less than 0.5%
2 0.5% to 5.0%
3 5.0% to 12%
4 12% to 20%
5 20% to 30%
6 30% to 80%
7 Greater than 80%

The draft amendment that the ESAs presented on June 30, 2020 shows the same class ranges30.

Products are divided into four categories, and the way the VEV is calculated differs by category31. Three categories mainly concern products that contain derivatives.

  • Within Category 1, products where the investor can lose more than the amount invested (point 4(a)) and products that correspond to items 4 to 10 of Section C of Annex I to MiFID II ((b)) have a market risk class of 7. Products whose prices are available less often than monthly, or for which there is no suitable proxy ((c)), are also in Category 1 but have a class of 6. For products that are futures, call options, or put options traded on a regulated market, the technical standards set separate rules as Category 1.
  • Category 2 covers products whose value tracks the price of the underlying asset directly or by a fixed multiple. The VaR is derived from the distribution of past prices.
  • Category 3 covers products whose value is determined in a way that is not a fixed multiple of the underlying price. The underlying price is simulated at least 10,000 times, and the VaR is derived from the distribution of the product's value at the end of the recommended holding period. The simulation resamples (with replacement) returns from the past five years.

A product whose value is not proportional to the price of the underlying asset (for example, a structured note with an embedded option) can fall within the definition of Category 3. The manufacturer decides which category an individual product falls into by reference to the conditions in the technical standards.

Credit risk class and the summary indicator

Credit risk is divided into credit risk classes (CRM) 1 to 6. If the claim on the product ranks below the claims of the issuer's senior creditors, the CRM is raised by two classes. If the product forms part of the issuer's own funds, it is raised by three classes32. The summary indicator is set from the combination of MRM and CRM using the following table.

Market risk class (MRM) CRM of 1 or 2 CRM of 3 CRM of 4 or 5 CRM of 6
1 1 3 5 6
2 2 3 5 6
3 3 3 5 6
4 4 4 5 6
5 5 5 5 6
6 6 6 6 6
7 7 7 7 7

The values in the table are SRI classes. The correspondence table in Part 3 of Annex II to the technical standards lists the seven MRM classes for each of the six CRM classes. The table above merges the CRM columns that have identical values in that table (1 and 2, and 4 and 5) into one column each, and swaps the orientation33.

Consider a hypothetical example in which a bank issues a structured note whose underlying has a VEV of 15% and whose credit risk class is 3. A VEV of 15% falls in the 12% to 20% range, so the MRM is 4. The combination of MRM 4 and CRM 3 gives 4, so the SRI is 4. If the claim on the same note ranks below the issuer's senior creditors, the CRM rises by two classes to 5, and with an MRM of 4 the SRI is 5.

Performance scenarios (2017 technical standards)

The 2021 amendment changed the method for performance scenarios. The application date is in the table in the section on entry into force, transitional provisions, and review. What follows is the method in the 2017 technical standards, not the amended values.

The KID shows four performance scenarios: favorable, moderate, unfavorable, and stress34. The value at the end of the recommended holding period is the 10th percentile for the unfavorable scenario, the 50th percentile for the moderate scenario, and the 90th percentile for the favorable scenario. The stress scenario is derived using a method that takes an extreme value corresponding to the 1st percentile if the holding period is one year and the 5th percentile otherwise. Performance is shown after costs are deducted35.

Performance at intermediate points is also shown. If the recommended holding period is more than one year and less than three years, the two points are one year and the end of the period. If it is three years or more, the three points are one year, half of the period (rounded up to a whole year), and the end of the period36. For example, for a structured note with a recommended holding period of 5 years, half is 2.5 years, which rounds up to 3, so performance is shown at 1 year, 3 years, and 5 years.

For futures, call options, and put options traded on a regulated market, the scenarios are shown as a graph of the payoff structure, and performance at intermediate points is not shown. The narrative explanation of the SRI is limited to a sentence stating the purpose of the indicator, a sentence stating the class, and, where relevant, a sentence stating that there is no capital protection37.

Entry into force, transitional provisions, and review

The main dates for the EU Regulation and the technical standards are as follows38.

Date Event
November 26, 2014 The European Parliament and the Council adopt Regulation (EU) No 1286/2014
March 8, 2017 The European Commission adopts Delegated Regulation (EU) 2017/653
January 1, 2018 The Regulation and the technical standards begin to apply
December 20, 2021 Delegated Regulation (EU) 2021/2268 is published
January 1, 2023 Planned date of application of the new rules under Delegated Regulation (EU) 2021/2268 (the intention indicated in a Commission statement)

The Regulation as adopted set the start of application at December 31, 2016, but Regulation (EU) 2016/2340 changed it to January 1, 201839.

Among collective investment schemes, management companies and sellers of UCITS (undertakings for collective investment in transferable securities) have a transitional provision. The text as adopted exempted these persons from the Regulation's obligations until December 31, 201940. The deadline was extended to December 31, 2021 by Regulation (EU) 2019/115641. The Commission statement published by ESMA on June 24, 2022 indicated the intention that the existing rules of the technical standards continue to apply until December 31, 2022. It also indicated the intention that, for products that offer UCITS as an investment option, the UCITS key investor information document (KIID) can be used to provide the specific information42.

There is movement toward a review of the EU Regulation. The European Commission adopted the retail investment strategy on May 24, 2023, which included a proposal to amend the PRIIPs Regulation43. The European Parliament is reported to have announced a provisional agreement with the Council on December 18, 2025. According to that announcement, the content includes forward-looking performance scenarios in the KID based on realistic data and reasonable assumptions, and the provisional agreement takes effect only once it is approved by both Parliament and Council44.

The UK

After leaving the EU, the UK kept a regulation of the same name as part of its domestic law and amended it separately. The UK version differs from the Regulation as adopted in the EU in the following respects45.

Item EU Regulation (as adopted) UK version (as of November 22, 2024)
Scope Manufacturers of PRIIPs and persons advising on or selling them Manufacturers of products made (or to be made) available to retail investors in the UK, and persons advising on or selling them
Authority Competent authorities designated by member states The Financial Conduct Authority (FCA) is named in the provisions on the making of technical standards and others
Technical standards Adopted by the European Commission on the basis of a draft from the ESAs May be made by the FCA
Sanctions articles (Articles 22 to 28) Included in the Regulation Deleted on December 31, 2020
UCITS exemption Until December 31, 2019 Until December 31, 2026 (the deadline before revocation)
Additional exemption Not in the text as adopted Shares in closed-ended investment companies listed in the UK (from November 22, 2024)

The UK's UCITS exemption deadline was extended by the UK regulations of 2021 (S.I. 2021/1149). The deadline moved from December 31, 2021 to December 31, 202646.

The UK PRIIPs Regulation was revoked on April 6, 2026. The revocation was made by the Financial Services and Markets Act 2023 and S.I. 2025/107847. The FCA set up the Consumer Composite Investments (CCI) regime and published its final rules (PS25/20) in December 2025. From April 6, 2026, manufacturers can choose to produce a product summary or to follow the existing disclosure requirements. The new rules take effect on June 8, 202748.

Practical implications

The manufacturer's main work is to draw up and publish the KID before offering the product to retail investors, and then to review it regularly and revise it when necessary. The seller's main work is to provide the KID free of charge before the contract or application. Marketing material must also contain no statement that contradicts the KID. Where a KID is misleading, for example, a retail investor who can show a loss can claim damages from the manufacturer. A person who breaches these obligations can be subject to sanctions imposed by the competent authority of the member state.

What this article does not cover

The annexes to the technical standards as amended in 2021, and the current treatment of UCITS in the EU, are not covered on this page. Approval and Official Journal publication after the provisional agreement on the retail investment strategy, and the content of the UK's CCI regime, are not covered on this page. The implications for Japanese financial institutions and Japanese regulation are not covered on this page.

Notes

  1. Regulation (EU) No 1286/2014 (adopted version, legislation.gov.uk) Article 1. Below, footnotes on this Regulation refer to the same version unless stated otherwise. ↩

  2. Regulation (EU) No 1286/2014 recital (6). ↩ ↩2

  3. Regulation (EU) No 1286/2014 Article 5(1) and Article 13(1). ↩

  4. Regulation (EU) No 1286/2014 recital (5). ↩

  5. Regulation (EU) No 1286/2014 the closing words and Article 34 (binding in its entirety and directly applicable). ↩

  6. Regulation (EU) No 1286/2014 the headings of Chapters I to VI and the articles in each chapter. ↩

  7. Regulation (EU) No 1286/2014 Article 8(5). ↩

  8. Regulation (EU) No 1286/2014 Articles 4(8), 20(2), and 24(2). ↩

  9. Regulation (EU) No 1286/2014 Article 15(1) and (2), Article 16(1), and Article 17(1). ↩

  10. European Commission PRIIPs page (purpose of 2021/2268; Official Journal publication of 2022/975 on June 24). ESMA publication of June 24, 2022. European Commission page on 2022/975 (dated August 2). The page titles are as in the sources. ↩

  11. Regulation (EU) No 1286/2014 Article 2(1). ↩

  12. Regulation (EU) No 1286/2014 Article 4(4) and (5). ↩

  13. Regulation (EU) No 1286/2014 Article 4(1) to (3). ↩

  14. Regulation (EU) No 1286/2014 recital (7). ↩

  15. Regulation (EU) No 1286/2014 Article 2(2)(a) to (g). The table groups points (e) to (g) as pension products. ↩

  16. Regulation (EU) No 1286/2014 Article 4(6). ↩

  17. Regulation (EU) No 1286/2014 Article 6(1), (2), and (4). ↩

  18. Regulation (EU) No 1286/2014 Article 8(3)(c) to (i). ↩

  19. Regulation (EU) No 1286/2014 Article 8(1) and (2). ↩

  20. Regulation (EU) No 1286/2014 Article 8(3)(b). ↩

  21. Regulation (EU) No 1286/2014 Article 8(3)(a). ↩

  22. Regulation (EU) No 1286/2014 Article 5(1), Article 9, Article 10(1), Article 13(1), Article 14(1) and (2), and Article 19. ↩

  23. Regulation (EU) No 1286/2014 Article 13(3)(a) to (d). ↩

  24. Regulation (EU) No 1286/2014 Article 13(3) and (4). ↩

  25. Regulation (EU) No 1286/2014 Article 11(1), (2), and (5). ↩

  26. Regulation (EU) No 1286/2014 Article 24(1) and (2)(a) to (e). The infringements covered are those listed in Article 24(1). ↩

  27. Regulation (EU) No 1286/2014 Article 24(3). ↩

  28. Commission Delegated Regulation (EU) 2017/653 (adopted version, legislation.gov.uk) Article 3(2)(a). Below, footnotes on the technical standards refer to the same version unless stated otherwise. ↩

  29. Delegated Regulation (EU) 2017/653 Annex II Part 1 points 1 and 2. The original shows the boundaries of the VEV table as ranges such as "0,5 % - 5,0 %". ↩

  30. ESAs, final report JC 2020 66 (June 30, 2020), Annex II as proposed to be amended, page 66 of the PDF. It is a draft, not an adopted regulation. ↩

  31. Delegated Regulation (EU) 2017/653 Annex II Part 1 points 3 to 7. Category 1 is in point 4, Category 2 in point 5, and Category 3 in point 6. Listed futures and options are in Annex IV point 25. ↩

  32. Delegated Regulation (EU) 2017/653 Annex II Part 2 points 44, 50, and 51. ↩

  33. Delegated Regulation (EU) 2017/653 Annex II Part 3 point 52 (correspondence table). ↩

  34. Delegated Regulation (EU) 2017/653 Article 3(3) and Annex IV point 1. ↩

  35. Delegated Regulation (EU) 2017/653 Annex IV points 5 to 8, 10 to 13, 30, and 31. ↩

  36. Delegated Regulation (EU) 2017/653 Annex IV points 19 to 21. ↩

  37. Delegated Regulation (EU) 2017/653 Article 3(5), Annex III point 6, and Annex IV point 25. ↩

  38. Regulation (EU) No 1286/2014 and Delegated Regulation (EU) 2017/653, the dates of signature, and Article 18 of 2017/653. December 20, 2021 is from the European Commission and January 1, 2023 from the ESMA publication. ↩

  39. Regulation (EU) No 1286/2014 (UK version, as of November 22, 2024, legislation.gov.uk) Article 34 and its note F85. Article 34 as adopted set the start of application at December 31, 2016. ↩

  40. Regulation (EU) No 1286/2014 Article 32(1). ↩

  41. S.I. 2021/1149 (UCITS Exemption Amendment Regulations 2021), footnote to the Explanatory Note. It states that Article 17(1) of Regulation (EU) 2019/1156 extended the deadline. ↩

  42. ESMA, "ESAs refer stakeholders to Commission statement on the application date of new PRIIPs rules" (June 24, 2022). Based on the quotation of the Commission statement. ↩

  43. European Commission, "Retail investment strategy". The adoption date is May 24, 2023. ↩

  44. European Parliament, "Deal on new measures to boost citizens' investments in financial markets" (December 18, 2025). ↩

  45. Regulation (EU) No 1286/2014, adopted version and UK version (as of November 22, 2024), Articles 2, 4A, 8(5), 15(2), 17(1), 22 to 28, and 32. The definition of the FCA is in Article 4 of the UK version. ↩

  46. The Packaged Retail and Insurance-based Investment Products (UCITS Exemption) (Amendment) Regulations 2021 (S.I. 2021/1149) Regulation 2. ↩

  47. Regulation (EU) No 1286/2014 (latest UK version, legislation.gov.uk) the note F1 at the top. Section 86(3) of the Financial Services and Markets Act 2023 and regulation 7(b) of S.I. 2025/1078. ↩

  48. FCA, "PS25/20" page (legislation in force April 6, 2026; new rules effective June 8, 2027; manufacturer's choice). The publication date is December 8, 2025 in the timeline graphic on that page. ↩

  49. Regulation (EU) No 1286/2014 Article 10(2)(d) and Article 9. ↩