Le document d’informations clés (DIC) est désormais généralisé à tous les placements collectifs

On 1 February 2023, the Autorité des marchés financiers (AMF) issued a press release, informing about the key information document (KID) now being generalized to all collective investments, compulsorily having to be updated at least once a year, or in the event of a significant change to any of the information presented.
Entering into force in January 2018, the European regulation called „PRIIPs“, which strengthens investor protection, has made it mandatory to submit a key information document (KID) before any subscription to a collective investment. After several years of transition, this obligation now applies to all funds, SCPIs, unit-linked life insurance contracts, as the KID replaces the old Key Investor Information Document (KIID) for all collective investments since 1 January 2023.
The new KID is a document harmonized at the European level which allows investors to find essential information on the investment, its nature and its main characteristics. It is not an advertising document, and must be understandable and submitted before any subscription. The purpose of the KID is to help understanding the investment and its risks, costs, potential gains and losses. Its format being standardized, it is also used to compare several investments. Its format being standardized, it is also used to compare several investments.
Professionals giving advice or recommending a financial product must provide the KID to potential investors free of charge and early enough for them to examine it before subscribing to the product in question. If one choose the investments alone and without benefiting from the advice of a professional, the financial intermediary (bank or online broker) must provide the corresponding KID of the investments to which it provides access. The KID can also be found on the website of the management company that manages the respective investment in question.
The KID concerns all so-called „packaged“ and insurance-based investment products, i.e. investments that allow to invest in assets (equities, bonds, real estate, etc. ) whose value fluctuates and which the investor does not directly buy. The investments concerned are funds and open-ended collective investment schemes (SICAVs), formula investments and bonds, real estate investment trust (REITs) or unit-linked life insurance contracts that give access to funds. On the other hand, there is no KID for so-called “non-packaged” products such as, for example, simple shares held in a securities account or stock savings plans.
The KID has to be presented on three pages of A4 format and must include the following information:
– the main characteristics of the product, presenting the objectives of the investment, the means used to achieve these objectives, its lifespan, as well as a description of the type of investor for which it is intended;
– a description of the risk and the possibilities of gains;
– a risk indicator, built on a scale of 1 (least risky) to 7 (most risky), carried out by combining market risk (the fall in the value of securities) with credit risk (the possibility that the establishment cannot reimburse);
– the maximum possible capital loss;
– four performance scenarios: 1. a “stressed” scenario (very unfavorable) and 2. an adverse, 3. an intermediate and 4. a favorable scenarios;
– the recommended holding period;
– the costs (direct, indirect, one-time and recurring costs) and their impact on the return, expressed as a percentage and in euros, in order to show the cumulative effects of the costs on the investment.