In the section entitled "What are the risks and what could I get in return?" of the key information document, PRIIP manufacturers shall apply the methodology for the presentation of risk as set out in Annex II, include the technical aspects for the presentation of the summary risk indicator as set out in Annex III and comply with the technical guidance, the formats and the criteria for the presentation of performance information, as set out in Annex 4A1.
By way of derogation from paragraph 1:1
subject to sub-paragraph (b), a PRIIP manufacturer must ensure the summary risk indicator produced via application of the methodology set out in Annex II is appropriate and unlikely to mislead investors in the PRIIP, if necessary by increasing the summary risk indicator that would otherwise be assigned to the PRIIP under that methodology; and1
in respect of a PRIIP which is issued by a venture capital trust, a PRIIP manufacturer must assign a summary risk indicator no lower than 6 or 7.1
In the section entitled "What are the risks and what could I get in return?" of the key information document, PRIIP manufacturers shall include the following:
the level of risk of the PRIIP in the form of a risk class by using a summary risk indicator having a numerical scale from 1 to 7;
an explicit reference to any illiquid PRIIP or PRIIP with materially relevant liquidity risk, as defined in Part 4 of Annex II, in the form of a warning to this effect in the presentation of the summary risk indicator;
a narrative below the summary risk indicator explaining that if a PRIIP is denominated in a currency other than pounds sterling, the return, when expressed in pounds sterling, may change depending on currency fluctuations;
a brief description of the PRIIP's risk and reward profile and a warning to the effect that the risk of the PRIIP may be significantly higher than the one represented in the summary risk indicator where the PRIIP is not held to maturity or for the recommended holding period, where appropriate;
for PRIIPs with contractually agreed-upon early exit penalties or long disinvestment notice periods, a reference to the relevant underlying conditions in the section "How long should I hold it and can I take money out early?";
an indication of the possible maximum loss, and information that the investment may be lost if it is not protected or where the PRIIP manufacturer is unable to pay out, or that necessary additional investment payments to the initial investment may be required and that the total loss may significantly exceed the total initial investment.
PRIIP manufacturers shall include appropriate information on investment performance, as set out in Annex 4A1 in the section entitled "What are the risks and what could I get in return?" of the key information document. 1