Discussion on “PRIIP-KID: Providing Retail Investors with Inappropriate Product Information?” (Graf)
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In the aftermath of the financial crisis in 2008 the work on key information documents for packaged retail and insurance-based investment products (PRIIP) was started in order to help consumers to better understand financial products, especially the risk and reward profile as well as the associated costs. A lack of understanding was blamed for unforeseen losses which some consumers suffered during the crisis. Improving transparency and helping retail investors to compare different products via a comprehensible pre-contractual document was and still is the main motivation for the PRIIP regulation.
To prevent divergence the aim was to establish uniform rules on transparency at Union level, thus enhancing consumer protection. Previously existing disclosures were sectoral or even national. These uncoordinated disclosure regimes made the comparison of different products difficult or even impossible, creating an unlevel playing field between different products and distribution channels.