Last Updated on June 3, 2025 by Arnaud Collignon
Understanding Regulation (EU) No. 1286/2014: Key Insights
Regulation (EU) No. 1286/2014, established by the European Parliament and the Council on November 26, 2014, aims to enhance investor protection and promote transparency in the financial markets. This regulation specifically focuses on the provision of information to retail investors regarding packaged retail and insurance-based investment products (PRIIPs).
Objectives of the Regulation
- Enhance Transparency: Ensure that investors receive clear and comprehensible information about investment products.
- Improve Comparability: Facilitate easier comparison of different investment products.
- Protect Investors: Provide safeguards to help investors make informed decisions.
Key Provisions
The regulation introduces several important requirements for product manufacturers and distributors:
- Key Information Document (KID): A standardized document that must be provided to retail investors, summarizing the essential features of the investment product.
- Risk Disclosure: Clear communication of the risks associated with the investment, including potential losses.
- Performance Scenarios: Presentation of potential future performance scenarios to help investors understand possible outcomes.
Who is Affected?
This regulation impacts a wide range of stakeholders, including:
- Investment firms
- Insurance companies
- Retail investors
Implementation Timeline
The regulation came into effect on January 1, 2018, and has since been a critical component of the European regulatory framework aimed at enhancing investor protection.
Conclusion
Regulation (EU) No. 1286/2014 represents a significant step towards ensuring that retail investors are equipped with the necessary information to make informed investment decisions. By promoting transparency and comparability, the regulation aims to foster a more trustworthy investment environment.