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KNEIP, Bob Kneip

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Devil is in the detail with the KIID

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New research in a joint study from KNEIP and Ebsylon shows that in a sample of KIIDs completed to date, while the contents are fairly good, improvements can be made in the form and presentation of the document.

The research explored the form and presentation of the KIID, section contents, and plain language, in a context of full compliance to the KIID Regulations. The study was based on a random sample of 100 KIIDs, which did not specifically include any of KNEIP’s clients, from 29 asset managers in four languages (English, French, German, Italian). While the content was found to be generally correct, with good attention given to the Risk and Reward Profile section, the vast majority of samples fell short of respecting the prescribed texts and presentation of information.

Mario Mantrisi, Head of product Management and Innovation and Member of the Executive Board at KNEIP, says: “Broadly, we were impressed with the positive strides the industry has made ahead of July 2012. What the research highlights is that asset managers have made excellent progress with the content of the KIID, while the form needs work.”

“While these findings may at first view seem somewhat pedantic, regulations are quite clear in their specifications and leave little room for interpretation of prescribed statements or formatting of various elements. The result is that fund managers distributing KIIDs cannot be assured that the KIIDs would pass the scrutiny of regulators, if checked. This risk is increased by exposure to potential complaints from investors, and the possibility of liability.”

Emmanuel Bégat, Managing Partner of Ebsylon says: “An overwhelming majority of KIIDs use jargon or technical terms, whereas regulations are clear about the need to avoid them. Ultimately what this research highlights is that the devil is in the detail when it comes to developing 100% compliant KIIDs. With all the resources and efforts being put into creating KIIDs, we feel that it’s worth going the extra mile to get them right.”

Bob Kneip (pictured), CEO of KNEIP, says: “As we head towards the end of the grandfathering period, we believe that our clients will require additional support when it comes to the production and distribution of fully compliant KIIDs.

“We have invested heavily in the technology, infrastructure, and expertise for our KIID business gearing up to 2012 and beyond. We are using the findings of this research to further improve our offering and deliver the best solution possible for asset managers in what we see as an important step-change for the industry.”
 

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