SIX Financial Information is developing a new service that makes it easier for financial firms to comply with investor protection rules, which take effect on 1 January 2017. The service allows manufacturers and distributors of Packaged Retail and Insurance-Based Investment Products (PRIIP) to create, maintain, and share documents for retail investors on demand. This innovative service offers the advantage of a one-stop for compliance to financial institutions.
The PRIIP regulation enters in force on 1 January 2017 and requires all manufacturers of Packaged Retail and Insurance-Based Investment Products (PRIIP) to produce standardized Key Information Documents (KIDs) to describe each product in plain language. Advisors must make these documents available to any private individual who is resident in the European Economic Area (EEA) before they buy a PRIIP.
SIX makes this complex process easier by offering an all-in-one service that is highly automated and easy to use. PRIIP manufacturers can create the documents in near real-time and make sure they are kept up to date using high-quality reference and market data from SIX. The document content is supported by European legal experts, who feed the plain language terminology in all EEA languages.
The generated PRIIP-KIDs are fed into the bank’s core banking software or online trading platform. Using the SIX platform, distributers can browse KIDs from any supplier, including third parties, and deliver them to retail investors on demand. Every KID generation is archived and documented for up to 10 years for a full audit trail.
Phillip Lynch, Head Markets, Products & Strategy SIX Financial Information explains: “We are building a solution that enables our clients to be compliant without complications, so they can remain focused on their core business and ensure investor satisfaction. Our aim is to take the pressure off our clients by reducing the cost and complexity of meeting the new rules. We remove uncertainty about how to put new processes in place and allow clients to take advantage of a scalable, utility approach to investor protection.”
The aim of the regulation is to establish an investing market where it is easy to compare products. Banks, wealth management firms, portfolio managers and financial institutions that create and distribute PRIIPs to EEA-resident private individuals must comply with the regulations. The European Commission estimates in its own publications, that this market generates up to 10 trillion Euro annually.