Align and comply or you will be fined

Last week, within 3 days, the Belgian financial supervisor FSMA fined a French Management Company for inconsistency in its investor documents and the Cyprus Security and Exchange Commission (CySEC) published a Circular related to its observations on PRIIPs KID provided by Cyprus Investment Firms (CIF) to the retail investors.

FSMA noticed that the estimated return shown in a monthly fund factsheet was not properly reflected compared to the relevant information in the Key Investor Information Document (“KIID”) and the prospectus.

The situation was even worse in Cyprus where the local regulator noted numerous breaches in the disclosure of mandatory information required by the PRIIPs regulation. One can list issues on format, language and content of the document. Even though CySEC didn’t apply fines on any CIF so far, its conclusions on its finding are very clear: the market must comply urgently with the regulation or the supervisor will take enforcement action.

Recently, ESMA has published an updated version of its Questions and Answers Application of the UCITS Directive that reminds that the KIID should be consistent with other fund documents and must be reviewed as soon as possible or at least at the next annual KIID review. The consistency of the use of a benchmark index in the documents or information channels is an example of one of the observations mentioned in this Q&A document.

Would you be interested to be assisted on a review of the consistency of your documentation  across your funds, or a specific review of your PRIIPs KID/UCITS KIID, InReg has the relevant experience, tools and expertise to help you complying with the regulations and doing so avoid potential fines and reputational damages.