Asset Management | PRIIPs Act adopted – New Rules for the Interaction with Retail Investors

On 11 June 2024, the Norwegian Parliament has adopted a new act on key information for packaged retail and insurance-based investment products (PRIIPS Act). The purpose of the PRIIPs Act is to strengthen consumer protection through requirements for increased information and transparency regarding complex investment products, such as interests in funds. The PRIIPS Act is relevant for fund managers, insurance companies and other entities manufacturing and marketing PRIIPs (Packaged Retail and Insurance-based Investment Products) to retail investors in Norway as well as Norwegian entities offering PRIIPs abroad. The new act can thus effect both, EEA and Non-EEA fund managers. In this newsletter, we provide a brief overview of what you need to know.

Obligation to Provide a Key Information Document (KID)  

All investment products covered by the PRIIPS Act, such as interest in a fund offered to retail investors, must be accompanied by a KID. Any market participant marketing a PRIIP will have to provide any potential retail investor with a KID in Norwegian. The KID should be concise, yet detailed, but no longer than three A4 pages. It must include specific sections detailing the product, its risk profile, cost structure, and potential returns. This is to facilitate investors’ understanding and comparison of their investment choices.  

Regular Updates of the KID 

The PRIIPs Act also requires that the KID is updated regularly, at least annually from the date of its initial publication, to reflect any significant changes. The specifics of these updates are governed by the accompanying delegated regulation. 

Claims Procedure 

Manufacturers of PRIIPs and entities that provide advice or sell these products must implement an effective procedure for retail investors to lodge complaints about the product or about the conduct of the PRIIP manufacturer, such as a fund manager, or any person marketing the product. Such procedure shall ensure a substantive, timely and proper reply to the retail investors. For cross-border disputes, particularly when the PRIIP manufacturer is based outside of Norway, effective redress mechanisms shall be available to retail investors. One practical approach to establishing such procedure can be to adhere to the complaints scheme of the Norwegian Alternative Investment Association (NKFF). 

Penalties for Non-Compliance 

In case of non-compliance with the obligations of the PRIIPS Act, the Norwegian Financial Supervisory Authority (NFSA) is authorised to take action, which may include prohibiting the distribution of the KID, requiring sellers or advisors of a PRIIP to inform investors of the non-compliance, or imposing fines on the company and individuals acting on its behalf. In severe cases, imprisonment may also be considered. 

BAHR Comments 

The PRIIPs Act is expected to take effect later this year, with enforcement expected to begin in Q3/2024. It should be noted that since 1 January 2023, the NFSA has required foreign UCITS marketed to retail investors in Norway to provide a Norwegian-language PRIIPs KID. Remember, since 1 January 2024, foreign UCITS (marketed under the EEA passporting regime) will have to pay an upfront and annual fee to the NFSA (please see our newsletter on the new regulatory fees). With the introduction of the PRIIPs Act, existing sector-specific information requirements will be replaced, establishing a new standard for market participant interacting with retail investors. We are already working on developing a Norwegian standard form that complies with all requirements outlined above. For more information on the implications of the PRIIPs Act for your business and to keep up with ongoing developments, feel free to contact us. 

Further information 


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