PRIIPs - Overview and FAQs - HSBC Global Private Banking

Overview

The PRIIPs Regulation has applied since 1 January 2018 and aims to help retail investors understand and compare the key features, risks, rewards and costs of different PRIIPs through the provision of a standardised Key Information Document (“KID”) meeting the requirements of the Regulatory Technical Standards (“RTS”). This is a free-of-charge pre-contractual, stand-alone document that is to be shared with the retail investor in the EEA or the UK in good time prior to the conclusion of any transaction.

In 2021, the EU proposed changes to the RTS for PRIIPs. The new RTS for the PRIIPs amendments significantly changes performance scenarios, cost computations and risk disclosures. This decision means that PRIIPs manufacturers are required to incorporate these revisions to the PRIIPs KID from 1 January 2023. In addition, the extended PRIIPs Regulation will bring significant changes to the fund industry. So far, the fund industry has been exempted from PRIIPs Regulation; manufacturers of UCITS funds have had to provide UCITS KIIDs to their clients. However, this exemption ceased as of the end of 2022 and from 1 January 2023, retail investors in the EEA purchasing UCITS funds will need to be provided with a PRIIPs KID.

In parallel to the changes the EU are making, the UK is adopting its own PRIIPs KID Regulation with effect from 1 January 2023 with the introduction of the UK PRIIPs KID for investors in the UK. In addition, the UK regulator is allowing UK or EEA UCITS KIIDs or NURS KII to continue to be produced and made available to UK investors until the end of 2026.

Frequently Asked Questions

The PRIIPs Regulation defines a PRIIP as:

an investment where, regardless of its legal form, the amount repayable to the retail investor is subject to fluctuations because of exposure to reference values or to the performance of one or more assets which are not directly purchased by the retail investor (a "packaged retail investment product"); or
an insurance-based investment product, which is an insurance product which offers a maturity or surrender value and where that maturity or surrender value is wholly or partially exposed, directly or indirectly, to market fluctuations (an "insurance-based investment product").

Examples of investments products that we may offer including but not limited to:

Foreign Exchange ("FX") and Precious Metal ("PM") Transactions such as Forwards, Swaps, Options
Over The Counter ("OTC") Derivatives such as Interest Rate Swaps
Exchange Traded Derivatives such as Exchange Traded Options
Structured Products such as Dual Currency Deposits, Structured Notes
Fixed Income Products such as CoCos, Sukuks, Convertible bonds
Equity Products such as Investment Trusts, REITS
Funds Products such as ETFs, Alternative Investment Funds, Mutual Funds (*UCITS/NURS exemption may apply)

*Undertakings for Collective Investment in Transferable Securities (“UCITS”)/Non-UCITS Retail Schemes (“NURS”)

A KID is a pre-contractual, stand-alone and standardised informative document prepared for each PRIIP according to the RTS, which is made available to retail clients in the EEA* or the UK. A KID does not replace a Term Sheet. A KID will be provided prior to the conclusion of any transaction.

*Countries in the European Economic Area (“EEA”): 27 European Union countries (Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden) plus Iceland, Liechtenstein and Norway

A KID will provide you with essential information about costs, potential risks and performance to enable you to better understand the product and make an informed investment decision. You will also be able to compare similar products on their risks, costs and performance.

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. The regulation is applicable worldwide.

If you or your authorised Investment Advisor (a Person with written Authority who provides instructions on your behalf) are an EEA resident, we will provide an EEA KID to yourself or to your authorised Investment Advisor.

If you or your authorised Investment Advisor are an UK resident, we will provide a UK KID to yourself or to your authorised Investment Advisor. For UCITS or NURS funds, you will receive UCITS KIID or NURS KII until the end of 2026.

If a KID does not exist for a PRIIP, we are not allowed to offer you the transaction – No KID no trade!

Before concluding a trade, you or your authorised Investment Advisor will receive an email including a KID or a link to the KID. If a link is provided, you will have access to the most up-to-date document by clicking on the link.

For some FX and PM products, a suite of pre-populated illustrative KIDs has been published on an HSBC Illustrative KIDs website. If you want to trade a product listed on the website, a link will be provided to you and you will be able to consult a KID at any time, prior to the conclusion of the transaction.

We will give you or your authorised Investment Advisor sufficient time to understand the product features, including the performance, risks and costs set out in the KID. We will confirm with you that you are happy to proceed before we conclude the transaction. You will have the opportunity to delay the transaction if you need more time to read the KID and evaluate the transaction.

In exceptional circumstances, predominantly when trading a custom-tailored OTC Derivative or Securitised Structured Product, a specific KID will need to be created. If you do not wish to delay the transaction and request that we should proceed, we can provide you with a KID post-trade after the conclusion of the transaction, with your explicit consent. In line with the PRIIPs Regulation this is only allowed if the trade has been specifically requested by you and the instruction is given by email, phone or fax.

PRIIPs guide available in a PDF format (873KB, PDF). Download link

PRIIP KIDs microsite

This website http://PRIIPs.hsbcprivatebank.com/ provides you, as a client of HSBC Global Private Banking, with illustrative Key Information Documents (KIDs) for a group of Foreign Exchange and Precious Metal products as required by the PRIIPs Regulation.

Please do not hesitate to contact your Relationship Manager or Investment Counsellor if you require further information.

Financial regulations

The information on this site refers to services or products which are not available in certain locations, or which, in any relevant location, may have components, methods, structures and terms different from the ones described, as well as restrictions on client eligibility. Please contact a Relationship Manager for details of services and products that may be available to you.

The use of the label ‘HSBC Private Bank’, ‘HSBC Private Banking’, ‘we’, or ‘us’ refers to HSBC’s worldwide private banking business, and is not indicative of any legal entity or relationship.

This information is entirely qualified by reference to the terms and conditions of the specific service, if any, provided by the relevant HSBC company.

Nothing here is to be deemed an offer, solicitation, endorsement, or recommendation to buy or sell any general or specific product, service or security and should not be considered to constitute investment advice.

Please note that HSBC Private Banking does not provide Legal and Tax Advice.

Before proceeding, please refer to the full Disclaimer and the Terms and Conditions.

PRIIPs - Overview and FAQs

Frequently Asked Questions

1. What is a PRIIP?

2. What is a KID?

3. What will a KID tell me and how will it benefit me?

4. Who will receive a KID?

5. How will a KID be provided?

6. Will I be given time to understand the transaction?

7. Will a KID always be provided pre-trade without impacting the timing of my transaction?

PRIIP KIDs microsite

Financial regulations

Legal information

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