ALFI UCITS IV implementation project – KID Q&A Document

Q. Will it be compulsory to use a glossary of terms?A. It is not compulsory to use a glossary of terms but you may define and use one if you wish. CESR will not issue apan-European glossary and nor do we expect any other regulator or industry association to issue one.Art 5(3)Q. Is it permitted to print in the footer of the second and third pages the following text or otherwise to repeatsimple document identity information (e.g., UCITS name and ISIN) on the top of the second and third pages ofa KID?Key Information Document, December 31, 2009Page2 of 2[Name of UCITS]A. Strictly speaking, no. Art 3(1) says, "No other information or statements shall be included …", which would appearto prohibit this additional text. The date is also prescribed by Art 4(13) and may not be repeated in a header or footer.In addition, the official name of the KID is "Key Investor Information", not "Key Information Document". However, theinclusion of discreet headers and/or footers that preserve the identity of the UCITS, page sequences and thedocument reference number when the KID is printed onto single-sided paper would aid clarity and we think that theyare likely to be accepted by regulators.Art 6Q. The Regulation says that the KID must not exceed two pages of A-4 paper when printed. Is it true that a KIDfor a structured fund may be 3 pages long?A. Yes, see CESR/09-949, Page 11, Box 2, Para 3 and EU Regulation 583/2010 Art 37.No referenceQ. Must the sections Objectives and Investment Policy, Risk and Reward Profile and Charges always bepresented on the first page of the KID (with the exception of structured funds) in order to aid comparison?A. With the exception of the title "Key Investor Information", which must be at the top of the first page (Art 4(1)), the EURegulation 583/2010 does not explicitly say which page a particular section of the KID must appear on (it only statesthe order in which they must be presented) but it is evident that the early sections will be on the first page and in mostcases the practical information section and the authorisation details will be on the second or (if applicable) the thirdpage.Q. If it is not possible to fit all of the above sections onto a single page, is it permissible to split thedescription of charges in detail over two pages?A. The EU Regulation 583/2010 does not prohibit sections from crossing a page break. Practitioners are therefore freeto decide this aspect of the KID's design.Q. May the management company add a document number in the header or footer to help it to managedifferent editions of the KID?A. Strictly speaking, no. Art 3(1) says, "No other information or statements shall be included …". However, a repeatedtitle and a discreet document number in a corner of a page is likely to be accepted by regulators.Q. When producing a 3-page KID for a structured fund, can I add page numbers and can I repeat the fund titleon the third page to eliminate the risk that it could be printed and incorrectly attached to the wrong KID?A. Strictly speaking, no. Art 3(1) says, "No other information or statements shall be included …". However, a discreetpage number is likely to be accepted by regulators.Q. Will ALFI develop a standard prototype for the KID, which could be available for its members to adopt?A. ALFI has no plans to prepare a Luxembourg standard model. CESR/10-1321 provides guidelines on a template thatCESR has developed for the KID.ALFI KID Q&A, Issue 1314, 11 April25 September 2012 Page 11