The Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs)
The aim of the PRIIPs Regulation is to encourage efficient markets by helping investors to better understand and compare the key features, risk, rewards and costs of different packaged retail and insurance-based investment products (PRIIPs), through access to a short and consumer-friendly Key Information Document (KID).
As a manufacturer and seller of a PRIIP we are required to prepare a KID for each PRIIP that we produce and to publish a copy on our website.
Who is a retail investor for the purpose of the PRIIPs Regulation?
The PRIIPS regulation applies to products sold to Retail clients (as defined in “MiFID II”). Under MiFID II, a retail client is any client that is not a professional client or an eligible counterparty (a client who possesses the experience, knowledge and expertise to make its own investment decisions and properly assess the risks that it incurs in accordance with criteria set out in MiFID II – the precise definition is set out in an Annex to MiFID II).
A “retail client” also includes any customer of an insurance undertaking or re-insurance undertaking within the meaning of the EU Insurance Mediation Directive who would not qualify as a professional client under MiFID II.
For these purposes, a Retail Investor means a person who is one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of the revised Markets in Financial Instruments Directive 2014/65/EU, (“MiFID II”); or (ii) a customer within the meaning of Directive 2002/92/EC (as amended the "Insurance Mediation Directive"), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in Directive 2003/71/EC (as amended, the "Prospectus Directive"), in each case as the relevant Directive forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended) (EUWA).
Following UK exit from EU – separate onshored version of PRIIPs in UK applies to retail investors in UK and EU version applies to investors in EU. We have a very limited product offering to EU Retail Clients. EU versions of relevant KIDs can be found specified with “EU Version”.
- investment products where the amounts repayable to the investor are subject to fluctuations from exposure to (i) reference values or to (ii) the performance of assets not directly purchased by the retail investor
- insurance-based investment products where the maturity or surrender value is exposed to market fluctuations.
Lloyds Bank plc do not offer insurance based investment products to its customers.
Current PRIIPs may include FX, Interest Rate and Commodity derivatives, amongst others, when sold to retail categorised clients.
Products obtained through Lloyds Bank plc that are not PRIIPs include, amongst others:
- deposits (other than structured deposits – a combination of a deposit and investment product)
- FX Spot transactions; and
- lending products.
Following review by the FCA, the rules and requirements on UK PRIIPS change by the 31st December 2022. Amongst other, the requirements and methodologies for presentation of performance scenarios in the KID has been amended with a requirement for narrative information on performance provided. You will be notified of any changes to the KIDS through this Website.
Key Information Documents (KIDs) required under PRIIPs
The KID is a stand-alone, standardised document prepared for each investment and whose form and content is governed by mandatory rules set out in the PRIIPs Regulation and its underlying rules & guidance. They are generic disclosures for each different type of PRIIP providing consumer-friendly, consistent and clear information to help Retail Investors to better understand and compare the key features, risk, rewards and costs of different PRIIPs provided by those selling them . A KID can be up to a maximum of 3 sides of A4-sized paper. Each KID contains generic disclosures for each different type of PRIIP, which is presented in a pre-determined sequence of sections. The sections are:
- What is this product?
- What are the risks and what could I get in return?
- What happens if Lloyds Bank is unable to pay out?
- What are the costs?
- How long should I hold it and can I take money out early?
- How can I complain?
- Other relevant information