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The Impact of Regulation on Document Production for Asset Managers

Over recent years, various pieces of European wide regulation impacting asset managers have come into force causing waves of change throughout the industry.


Much of this has been introduced with the objective of improving transparency and for the benefit of the end investor to give them a clearer picture of the funds they are investing in. From a period of little consistency or standardisation in investor documents with the simplified prospectus, regulation has aimed to bring consistency through the introduction first, of KIIDs (Key Investor Information Documents), and more recently, the PRIIPS (Packaged Retail and Insurance-based Investment Products) KIDs (Key Information Documents) regulation. However, this has meant significant challenges for asset management firms who need to keep pace with new requirements.

Simplified Prospectus and KIIDs

In 2011, the introduction of KIIDs, for all UCITS IV funds, designed to inform investors of the objectives and costs of the retail funds they were invested in, as well as the risks and the historical performance.

This was a significant departure from the simplified prospectus which included the investment objective, what the fund invests in, the strategies the fund will use to meet those objectives and other key details. These documents were generally considered easier to produce and required less frequent updating. Furthermore, there were only a handful of documents to produce.

The first challenge of the UCITS regulation was accepting the fact that the industry was undergoing change. A failure to accept this by asset managers was a cause for any later noncompliance as firms were not prepared for the size of the task that lay ahead which included having to produce a separate two-page document for every share class and language variation in all funds. We saw many groups come to us at that point for support in the production of their KIIDs.

Among other challenges, is the fact that KIID documents require yearly updates as well as updates whenever there is a change to essential information shown in the document. This ensures that investors always receive the most accurate and up to date information before any transaction. This also means that much more time is spent on producing the documents and monitoring for when changes are required, not to mention the drain on resources for asset management firms.

In addition, producing these documents also requires coordinating different departments to work together to produce relevant data and making sure this data is displayed in the correct format.


Three years on from the KIID regulation, asset managers (as well as Life Companies, Structured Product providers and many others) were faced with another European regulation that forced them once again, to reconsider their internal processes to ensure compliance. PRIIPs KIDs were first announced in 2014 and aimed at helping investors make comparisons of products, with key features displayed in a single three-page document, while also improving consistency across Europe and rebuilding trust in the industry which was severely damaged following the financial crisis of 2008 when weaknesses in the system were badly exposed.

The challenges of producing PRIIPs KIDs are even greater than for UCITS KIIDs. Data issues such as risks, returns and costs being forward-looking rather than looking at just historical performance and additional disclosures at product and fund level make life considerably more difficult for asset managers, while production is also a challenge.  Gathering such a huge set of data for an array of funds puts significant strain on firms as well as the calculations needed for the Summary Risk Indicator (SRI) and also the design of the products themselves. Given all these challenges many more asset managers are turning to third-party providers to take away this complex process from already stretched internal resources.

How FE Precision+ Documents can help:

Our FE Precision+ Document service can make fund document production simple. We provide an automated PRIIPs and UCITS service designed to alleviate the difficulty of managing the data collection and document production process in a speedy and efficient way. More than just producing the document, we also allow for the documents to be designed around the firm’s brand and we monitor the data and alert when changes to the documents are required.

The consequences for falling to comply with the regulations are serious. For example, back in 2014 Invesco Perpetual was fined 18.6 million pounds for failing to disclose investment limits, which protect investors by limiting their risk exposure. In light of the strictness of the regulation, FE ensures that your data is fully validated to guarantee complete accuracy, reducing the risk of producing incorrect documents.

Looking forward

Whilst the PRIIPs deadline (3 January 2018) has passed and FE has successfully processed 29,300 European PRIIPs Templates (EPTs) and 886 KIDs on behalf of asset managers and platforms, there are still some asset managers struggling to cope with the volume of additional work required to keep documents up to date and implement ongoing monitoring.

In terms of regulation, the changes are seemingly never-ending. The European regulators are conducting a review which we expect to conclude at the end of this year. We expect this review to conclude that the current exemption for UCITS funds to produce PRIIPs KIDs will cease at the end of 2019 when PRIIPs KIDs will require to be produced for all products – the content of the PRIIPs KIDs may also change depending on what else this year’s review concludes. Although this will simplify document production for firms in the future, it does mean yet more changes to the processes asset managers will have to go through. The PRIIPs regulation is effectively a changeover period for UCITS allowing them time to prepare for the 2019 deadline although this timeline could change should the European Commission decide that the industry needs more time to adapt.

With one eye always on the future, FE will continue to adapt its systems and processes to meet future regulatory requirements and support asset managers in ensuring they remain compliant in the years to come.

To find out more about how we can help click here.