DBS Bank said it will not sell PRIIPs to retail investors in the EEA from 1 January 2018 as it is evaluating the impact of new KID regulation.
Bankbazaar.sg, Singapore - December 26, 2017
SINGAPORE - DBS Bank announced that it will suspend the sales of packaged retail and insurance-based investment products (PRIIPs) to retail investors in the European Economic Area (EEA) from 1 January 2018, until further notice.
The announcement came in response to the new regulation released by the European Commission regarding key information documents (KIDs) for PRIIPs. The latest regulation requires DBS to provide every retail investor with a KID while advising on or selling a PRIIP. The bank said that its product manufacturers were still considering the impact of the new regulation and, therefore, KIDs for any structured notes or products will not be available on its platform for now.
DBS said that retail investors in EEA who already own such products will not be affected by this development.
PRIIPs are investment products that are designed to help customers save for a specific objective, like buying a home or funding the education of a child. In Europe, the PRIIP market is estimated to be around EUR10 trillion. Covering a wide range of investment products, PRIIPs are often considered complicated and tough to understand. It’s in view of these shortcomings and to protect the best interests of investors, that the European Commission decided to adopt this new regulation on PRIIPs.
The new regulation requires seller of PRIIPs to provide investor with a KID that contains all the information related to such investment products in simple and clear terms, in no more than three pages. According to the European Commission, the KID should include name of the product, identity of the producer, types of investors who can purchase the product, product’s risk and reward details, any costs related to investment in such products, and information about complaint redressal mechanism.