All new Ucits funds were mandated to begin offering the document on 1 July, last Friday, while all other funds have the next 12 months to prepare for full implementation.
The two-page KIID document replaces the existing, and longer, simplified prospectus that all funds must provide to investors.
While much shorter, the KIID has created concerns for groups as they also include risk ratings based on a funds’ volatility over five years. This places the majority of UK funds into just two ratings bands, meaning many UK equity funds could have the same rating as emerging markets or corporate bond portfolios.
The KIID also includes a variation of the compulsory inclusion of a TER figure in the prospectus. The charge, described as an on-going fee, is designed to serve the same purpose as the TER but the calculations are not identical, the IMA has said.
Timeline
- 1 July 2011: All new Ucits funds domiciled in Europe that are launched after 1 July, 2011, are required to have a KIID;
- 1 July 2011 to 30 June 2012: During this time all Ucits funds domiciled in Europe are required to replace simplified prospectuses with KIIDs;
- 30 June 2012: All Ucits funds domiciled or distributed within Europe should all have replaced their simplified prospectuses with KIIDs by this date.
Source: Cofunds
