The Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs)

– Lloyds Bank Corporate Markets plc

The aim of the PRIIPs Regulation is to encourage efficient EU markets by helping investors to better understand and compare the key features, risk, rewards and costs of different PRIIPs, through access to a short and consumer-friendly Key Information Document (KID).

The PRIIPs Regulation only applies to products that are defined as PRIIPs and only if the PRIIP is made available to retail investors. Retail investors are:

  • retail clients, or
  • customers (as referred to in the Insurance Mediation Directive (IMD)), where they would not qualify as professional clients under the Markets in Financial Instruments Directive (MiFID)

A PRIIP is an investment where, regardless of its legal form, the amount repayable to the retail investor is subject to fluctuations because of exposure to reference values or to the performance of one or more assets that are not directly purchased by the retail investor; or an insurance-based investment product which offers a maturity or surrender value that is wholly or partially exposed, directly or indirectly, to market fluctuations.

Identifying whether a particular product is a PRIIP may not be straightforward as the concept of ‘exposure to reference values’ is wide. There is ongoing discussion in the market in relation to which features will bring an instrument within scope of PRIIPS which Lloyds Bank is monitoring. Current PRIIPS may include FX, Interest Rate and Commodity derivatives, amongst others, when sold to retail categorised clients.

CB Markets products obtained through Lloyds Bank Corporate Markets plc that are not PRIIPs include, amongst others:

  • deposits (other than structured deposits as defined in MiFID);
  • FX Spot transactions;
  • Lending products