The words "key investor information" must be clearly stated in this document.
Key investor information must include appropriate information about the essential characteristics of the UCITS scheme which is to be provided to investors so that they are reasonably able to understand the nature and risks of the investment product that is being offered to them and, therefore, to take investment decisions on an informed basis.
identification of the scheme;
a short description of its investment objectives and investment policy;
past performance presentation or, where relevant, performance scenarios;
costs and associated charges; and
risk/reward profile of the investment, including appropriate guidance and warnings in relation to the risks associated with investments in the scheme.
The essential elements referred to in (4) must be comprehensible to the investor without any reference to other documents.
A key investor information document must clearly specify where and how to obtain additional information relating to the proposed investment, including but not limited to where and how the prospectus and the annual and half-yearly reports can be obtained on request and free of charge at any time, and the language in which that information is available to investors.
Key investor information must be written in a concise manner and in non-technical language. It must be drawn up in a common format, allowing for comparison, and must be presented in a way that is likely to be understood by retail investors.
Key investor information must be used without alterations or supplements, except translation, in each EEA State where a UCITS marketing notification has been made so as to enable the marketing of the scheme'sunits in that State.
[Note: article 78 of the UCITS Directive]
The KII Regulation sets out the form and content of a key investor information document. This Regulation is directly applicable in the United Kingdom and accordingly its articles (but not the preceding recitals) are binding on all firms to which it applies. Under the Regulation an authorised fund manager must ensure that each key investor information document it produces for a UCITS scheme complies with the requirements of the Regulation. For ease of reference the Regulation is reproduced in COLL Appendix 1EU (The KII Regulation).
While the original key investor information document is required by COLL 4.7.2 R to be drawn up in English, an authorised fund manager may prepare an accurate translation of it into any language for the purpose of marketing the units of the UCITS scheme in the United Kingdom. Any such translation should be prepared without alterations or supplements.
The key investor information document must:
[Note: article 79(1) of the UCITS Directive]
Section 90ZA of the Act (Liability for key investor information) provides that a person will not incur civil liability solely on the basis of the key investor information document, including any translation of it, unless it is misleading, inaccurate or inconsistent with the relevant parts of the prospectus.
Article 20 of the KII Regulation prescribes the wording of a warning to investors that must be included in the "practical information" section of the key investor information document. It states that an authorised fund manager may be held liable solely on the basis of any statement contained in the document that is misleading, inaccurate or inconsistent with the relevant parts of the prospectus for the UCITS scheme.
An authorised fund manager must keep up to date the essential elements
[Note: articles 63(3) and 82 of the UCITS Directive]
Authorised fund managers are advised that CESR issued two separate guidelines regarding the methodology that should be used in calculating the synthetic risk and reward indicator and the ongoing charges figure, both of which must be disclosed in the key investor information document for each UCITS scheme which they manage.
In line with the KII Regulation, firms in producing their key investor information documents should take account of CESR's methodologies in calculating the figures for the synthetic risk and reward indicators and for ongoing charges to be disclosed in those documents. For ease of reference links to these guidelines are shown below, as follows:
Methodology for the calculation of the synthetic risk and reward indicator in the KII (CESR/10-673) http://www.esma.europa.eu/node/49058
Methodology for the calculation of the ongoing charges figure in the KII (CESR/10-674) http://www.esma.europa.eu/node/49059
Firms should note that these methodologies may in due course become directly applicable obligations in the light of the European Securities and Markets Authority's powers to develop implementing technical standards in this area.
Authorised fund managers of a UCITS scheme3 are further advised that CESR, and its successor body, ESMA, have3 issued guidelines in relation to several other matters concerning key investor information. These are:
CESR's guidelines on a common definition of European money market funds, which refer to matters that should be included in the key investor information for money market funds and short-term money market funds (CESR/10-049) http://www.esma.europa.eu/content/Guidelines-Common-definition-European-money-market-funds3
COBS 4.13.2R(1)(b) and (c) (Marketing communications relating to UCITS schemes or EEA UCITS schemes) require an authorised fund manager to ensure that its marketing communications that contain an invitation to purchase units in a UCITS scheme or EEA UCITS scheme, indicate that a prospectus and key investor information exist, specifying where they may be obtained by the public or how the public may have access to them.