The Association of Investment Companies (AIC) has responded to HM Treasury’s announcement that the current exemption for Undertakings for the Collective Investment in Transferable Securities (UCITS) funds from the requirements of the Packaged Retail Investment and Insurance-based Products (PRIIPs) regime will be extended by five years to 31 December 2026.

This means that UCITS funds providers will continue to produce a Key Investor Information Document (KIID), as per the requirements of the UCITS Directive, until 31 December 2026.  By contrast, investment companies have been producing a Key Information Document (KID) since 1 January 2018.

Ian Sayers, Chief Executive of the Association of Investment Companies (AIC), said: “We are beyond frustrated that investment companies still have to produce toxic Key Information Documents (KIDs).  Can anyone explain why it is OK for investors in investment companies to continue to receive this misleading and dangerous information but investors in UCITS funds are protected from these KID disclosures until they can be reformed?

“KIDs should be suspended pending reform for all investments.  At the very least, investment companies should be permitted the option to prepare a KIID in line with the UCITS requirements.  Our research demonstrated unequivocally how KIDs often exaggerate likely future performance, understate risks and actively encourage a ‘buy high, sell low’ strategy.  Yet our members and their managers are still required to produce this information knowing that it’s likely to mislead investors when competing funds are being protected from these consequences.”