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Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

You are viewing the version of the document as on 2021-01-01.

ANNEX V METHODOLOGY FOR THE PRESENTATION OF PERFORMANCE SCENARIOS

PART 1

General presentation specifications

  1. (1)

    The performance scenarios shall be presented in a way that is fair, accurate, clear and not misleading, and that is likely to be understood by the average retail investor.

  2. (2)

    Where performance scenarios may be shown only at maturity or at the end of the recommended holding period, as for the PRIIPs referred to in point 21 of Annex IV, that shall be clearly explained in the narrative set out in element E in Part 2 of this Annex.

  3. (3)

    In all cases, the narrative explanations set out in elements A, B, C, D and F in Part 2 of this Annex shall be included, except in the case of Category 1 PRIIPs referred to in point 17 of Annex IV, where the narrative explanations set in elements G to K shall be used instead.

PART 2

Presentation of performance scenarios

For all PRIIPs except for category 1 PRIIPs referred to in point 17 of Annex IV, PRIIP manufacturers shall present the performance scenarios by means of the formats below, depending on whether the PRIIP is a single investment or premium or a regular payment or premium PRIIP. The interim periods may differ depending on the length of the recommended holding period. For insurance-based investment products additional rows are included in respect of the scenario for the insurance benefits including the cumulative biometric risk premium for a regular premium insurance-based investment product. Returns for that scenario shall only be shown in absolute values.

Template A: Single investment and/or single premium is paid.

Single investment paid

OTHER

Single premium paid

OTHER

Template B: Regular investments and/or premiums are paid.

Regular investments paid

OTHER

Regular premiums paid

OTHER

Performance scenarios

[Element A] This [table/graph] shows the money you could get back over the next [recommended holding period] years, under different scenarios, assuming that you invest EUR […] [per year].

[Element B] The scenarios shown illustrate how your investment could perform. You can compare them with the scenarios of other products.

[Element C] The scenarios presented are an estimate of future performance based on evidence from the past on how the value of this investment varies, and are not an exact indicator. What you get will vary depending on how the market performs and how long you keep the investment/product.

[Element D] The stress scenario shows what you might get back in extreme market circumstances, and it does not take into account the situation where we are not able to pay you.

[Where applicable][Element E] This product cannot be [easily] cashed in. This means it is difficult to estimate how much you would get back if you cash in before [the end of the recommended holding period/maturity]. You will either be unable to cash in early or you will have to pay high costs or make a large loss if you do so.

[Element F] The figures shown include all the costs of the product itself, [where applicable]:[but may not include all the costs that you pay to your advisor or distributor][and includes the costs of your advisor or distributor]. The figures do not take into account your personal tax situation, which may also affect how much you get back.

[Element G] This graph illustrates how your investment could perform. You can compare them with the pay-off graphs of other derivatives.

[Element H] The graph presented gives a range of possible outcomes and is not an exact indication of what you might get back. What you get will vary depending on how the underlying will develop. For each value of the underlying, the graph shows what the profit or loss of the product would be. The horizontal axis shows the various possible prices of the underlying value on the expiry date and the vertical axis shows the profit or loss.

[Element I] Buying this product holds that you think the underlying price will [increase/decrease].

[Element J] Your maximum loss would be that you will lose all your investment (premium paid).

[Element K] The figures shown include all the costs of the product itself, but may not include all the costs that you pay to your advisor or distributor. The figures do not take into account your personal tax situation, which may also affect how much you get back.