PRIIPs - Overview and FAQs

PRIIPs applies to funds and products marketed to EEA-resident retail investors and involves producing and issuing a generic pre-sale document.

MiFIID II

Overview

From 1 January 2018 the Packaged Retail and Insurance-based Investment Products Regulation ("PRIIPs Regulation") will come into force which aims to increase the transparency and comparability of investment products through the issue of a standardised short form disclosure document - the PRIIPs Key Information Document (KID).

The Regulation is intended to make it easier for retail investors to understand and compare the key features, risk, rewards and costs of different products in scope of PRIIPs through the provision of the KID. This is a free-of-charge pre-contractual, stand-alone document that is to be shared with the investor prior to the conclusion of any transaction.

The regulation applies to PRIIPs products and services purchased by an EEA Resident Retail Investor, regardless of their nationality. The regulation is applicable worldwide, no matter where a PRIIP is purchased, as long as it is purchased by an EEA Resident Retail Investor.

We have outlined more information below regarding the key changes and impacts of PRIIPs.

Frequently Asked Questions

1. What is a PRIIP?
2. What is a KID and who must receive it?
3. What will a KID tell me and how will it benefit me?
4. Who will receive a KID?
5. How will a KID be provided?
6. Will I be given time to understand the transaction?
7. Will a KID always be provided pre-trade without impacting the timing of my transaction?

Frequently Asked Questions

1. What is a PRIIP?

From 1 January 2018 the Packaged Retail and Insurance-based Investment Products Regulation ("PRIIPs Regulation") will come into force which requires us to provide you with a pre-contractual Key Information Document. The main goal of the PRIIPs Regulation is to enhance investor protection standards for retail clients.

Examples of investments covered by the PRIIPs regulation include:

  • Non-UCITs* Retail Schemes
  • Foreign Exchange ("FX") Transactions (Forwards, Futures, Options)
  • Over The Counter ("OTC") Derivatives (Caps, Collars and Swaps)
  • Exchange Traded Derivatives
  • Structured Products and Deposits

*Undertakings for Collective Investment in Transferable Securities (UCITS)

2. What is a KID and who must receive it?

The KID (Key Information Document) must be provided to an EEA Resident Retail Investor when purchasing a product covered by PRIIPs.

A KID is a pre-contractual informative document which will be provided prior to the conclusion of any such transaction. A KID does not replace a Term Sheet. Both a KID pre-trade and a Term Sheet post-trade will be provided for a transaction covered by PRIIPs.

3. What will a KID tell me and how will it benefit me?

A KID will provide you with essential information about costs, potential risks and performance to enable you to better understand the product and make an informed investment decision. You will also be able to compare similar products on their risks, costs and performance. For more information please download the PRIIPs guide available in a PDF format (2.5MB, PDF).

4. Who will receive a KID?

If you are an EEA Resident Retail Investor we will provide a KID to yourself or to a Person with written Authority who provides instructions on your behalf (ie. an authorised Investment Advisor).

5. How will a KID be provided?

Before concluding a trade you/your investment advisor will receive an email including a link to the KID. By clicking on the link you will have access to the most up-to-date document.

For Foreign Exchange ("FX") and Precious Metal ("PM") Forwards, Swaps, and Options a suite of pre-populated illustrative KIDs has been published on an HSBC Illustrative KIDs website. If you transact in FX products, the link will be provided to you and you will be able to consult a KID at all times, prior to the conclusion of the transaction.

6. Will I be given time to understand the transaction?

We will give you or the advisor acting on your behalf sufficient time to understand the product features, including the performance, risks and costs set out in the KID. We will confirm with you that you are happy to proceed before we conclude the transaction. You will have the opportunity to delay the transaction if you need more time to read the KID and evaluate the transaction.

7. Will a KID always be provided pre-trade without impacting the timing of my transaction?

In exceptional circumstances, predominantly when trading a custom-tailored OTC Derivative or Securitised Structured Product, a specific KID will need to be created. If you do not wish to delay the transaction and request that we should proceed, we can provide you with a KID post-trade after the conclusion of the transaction, with your explicit consent. In line with the PRIIPs Regulation this is only allowed if the trade has been specifically requested by you and the instruction is given by email/phone or fax.

Please do not hesitate to contact your Relationship Manager or Investment Counsellor if you require further information.

The HSBC Group is one of the largest banking and financial service organisations in the world.

Legal Information

The information on this site refers to services or products which are not available in certain locations, or which, in any relevant location, may have components, methods, structures and terms different from the ones described, as well as restrictions on client eligibility. Please contact a Relationship Manager for details of services and products that may be available to you.

The use of the label ‘HSBC Private Bank’, ‘we’, or ‘us’ refers to HSBC’s worldwide private banking business, and is not indicative of any legal entity or relationship.

This information is entirely qualified by reference to the terms and conditions of the specific service, if any, provided by the relevant HSBC company.

Nothing here is to be deemed an offer, solicitation, endorsement, or recommendation to buy or sell any general or specific product, service or security and should not be considered to constitute investment advice.

Please note that HSBC Private Bank does not provide Legal and Tax Advice.

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