Risk glossary

 

Packaged Retail and Insurance-based Investment Products (Priips) regulation

Priips is a European Union term for packaged retail investment products, such as insurance policies, structured products, funds and structured deposits.

The Priips regulation, which came into force in the EU in 2018, is aimed mainly at protecting retail investors. It requires sellers of the products to provide a key information document (Kid) to investors. The Kid contains certain information that was not always available before. This includes the name of the product and identity of the provider, the types of investors it is intended for, the risk-and-reward profile and the maximum loss.

More controversially, issuers must also provide a performance projection for the product under different market conditions. Dealers must follow a prescribed methodology, which can produce results some see as overly optimistic.

The rules also require issuers to provide a simple breakdown of the risks and costs of each product so buyers can easily compare performance across investments. However, some complain that differences in calculation methodology between issuers make comparisons impossible.

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