How is the SRRI calculated?
The determination of the SRRI is based on the standard deviation of annualized monthly historical return volatility of the past five years of the fund, where available and appropriate.
The SRRI then translates the volatility of the returns into an SRRI classification..
What are examples of PRIIPs?
PRIIPs are offered by banks and other financial institutions.
Products in the package generally include stocks, bonds, insurance policies, as well as structured funds, structured deposits, and structured products..
What does the PRIIPs regulation apply to?
The PRIIPs regulation applies to PRIIPs purchased by a retail investor who is located in or is an EEA or UK resident, regardless of their nationality..
What is a Category 3 Priip?
Those products offer non-leveraged exposure, or leveraged exposure, but with constant multiples.
In contrast, Category 3 PRIIPs reflect the prices of underlying investments that are not reflected as a constant multiple.
This includes e.g. structured products with caps and/or floors..
What is the PRIIPs rule?
The PRIIPs Regulation
Anyone advising a retail investor on a PRIIP or selling a PRIIP to a retail investor must provide the investor with this KID before any transaction is concluded. 2.
- The KID is a stand-alone, standardised document that must be prepared for each investment
What is the risk indicator for the kid for PRIIPs?
Similar to the SRRI, the KID for PRIIPs will also contain a risk indicator, the SRI (Summary Risk Indicator).
This indicator is a combination of a Market Risk Measure (MRM, range: 1 [low risk] to 7 [high risk]) and a Credit Risk Measure (CRM, range: 1 [low risk] to 6 [high risk])..
- The SRI is a standardised risk indicator that takes into account both, the volatility of a financial instrument (market risk) and the creditworthiness of the issuer (credit risk).
- Those products offer non-leveraged exposure, or leveraged exposure, but with constant multiples.
In contrast, Category 3 PRIIPs reflect the prices of underlying investments that are not reflected as a constant multiple.
This includes e.g. structured products with caps and/or floors.
