Better Finance and EFAMA have always been strong supporters of the “PRIIPs1 ” Key Information Document (“KID”), seeing it as a powerful instrument for retail investors to enable sound investment choices by allowing easier comparisons within a wide range of investment products. In order for this to happen, the rules defining the detailed contents of the PRIIPs KID must be correctly calibrated so that investors are given meaningful, comprehensible and comparable information.

Unfortunately, the recently rejected implementing rules for the PRIIPs KID (“RTSs”) suffered from a number of flaws, leading to clearly negative consequences for retail investors. Better Finance and EFAMA therefore firmly believe these flaws need to be addressed in order to avoid such an outcome.

Even if Better Finance and EFAMA may have diverging views on other issues, those addressed in this letter are so crucial for individual investors as well as for asset managers that the two organisations have come to a consensual view here. There are at least two crucial issues that need to be addressed: (1) allowing the disclosure of past performance, and (2) fixing the misleading disclosure of costs and fees, and – in particular – the calculation methodology of transaction costs.