Small investors [What Europe does for you]

With European elections coming up in May 2019, you probably want to know how the European Union impacts your daily life, before you think about voting. In the latest in a series of posts on what Europe does for you, your family, your business and your wellbeing, we look at what Europe does for small investors.

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Individual investors who buy securities for themselves (and not on behalf of a fund or a bank) have access to a growing range of investment products, funds and investment-linked insurance policies, also known as ‘packaged retail and insurance-based investment products’ (or PRIIPs), offered by banks and insurance companies. The financial crisis has shown that, when it comes to investing in financial products, the information supplied to investors is of the utmost importance.

That is why the European Union’s ‘PRIIPs Regulation’ obliges companies that produce or sell such investment products to provide investors with a ‘key information document’ (referred to as a KID) for each product.

This document should be at most three pages long (font size 8 to 11) and provide clear information on the product, allowing the investor to take an informed investment decision. It should include at the very least the name of the product and the identity of the producer, the types of investors for whom it is intended, the risk and reward profile of the product (including the maximum potential loss to the investor), the costs to the investor associated with investment in the product, and also information on the complaints an investor can make, in the event of problems with the product or the person producing, advising on or selling it.

Further information

• Investment products, https://europa.eu/youreurope/citizens/consumers/financial-products-and-services/investment-products/index_en.htm
• Key information about investment products, http://eur-lex.europa.eu/legal-content/EN/LSU/?uri=CELEX:32014R1286