EU PRIIPs Regulations

December 5, 2017

The European Union packaged retail and insurance based investment products (PRIIPs) regulations become effective as of January 1, 2018. These regulations are relevant for investment managers, whether based in the EU or outside of the EU, that make open-end investment funds available to EU retail investors. Retail investors include high net worth individuals, municipalities and local authorities that cannot “opt up” in order to meet the definition of a professional client. It is important to note that under the PRIIPs regulations, an investment fund could be deemed to be made available to an EU retail investor even if the fund is relying on reverse solicitation for purposes of AIFMD. Additionally, while managers may not directly distribute their fund interests to EU retail investors, the PRIIPs regulations may also apply, depending upon the circumstances, if the manager has entered into third party solicitation agreements with wealth managers or private banks and the underlying client is based in the EU.

If an investment manager wishes to accept investments from EU retail investors that cannot satisfy the requirements to “opt up” to professional client status, then the manager will need to prepare a key information document (KID) in accordance with the PRIIPs regulations. The content of the KID is prescribed under the regulations and includes a summary risk indicator and analysis of performance scenarios under specified conditions.

The attached memorandum prepared by our investment management alliance partner, Simmons & Simmons LLP, entitled EU PRIIPs Regulation: Do you need a “KID” for your AIF?, provides additional detail regarding the PRIIPs regulations.

You may contact your primary Investment Management Group attorney at Seward & Kissel for more information regarding the PRIIPs Regulation, including the need to prepare a KID.


If you have any questions regarding the matters covered in this memo, please contact any of the partners and counsel listed below or your primary attorney in Seward & Kissel’s Investment Management Group.