ANNEX VII
PRESENTATION OF COSTS
Immediately under the heading of the section entitled ‘What are the costs?’, the following warning shall be included, unless the PRIIP manufacturer knows that no additional costs will be charged by the person advising on, or selling, the PRIIP:
‘The person advising on or selling you this product may charge you other costs. If so, this person will provide you with information about these costs and how they affect your investment.’
In the cost tables set out below, the term ‘exit’ shall be used to represent the end of the investment. Where that term might be misleading for specific types of PRIIPs, an alternative term may be used, such as ‘terminate’ or ‘surrender’.
Table 1 for all PRIIPs except those referred to in Article 13, point (b) and in point 76c of Annex VI (autocallables)
The PRIIP manufacturer shall include the following headings, narratives and the table 1 showing the aggregated cost figures in monetary and percentage terms specified in points 61 and 62 of Annex VI with the holding periods referred to in point 90 of that Annex:
‘ Costs over time
The tables show the amounts that are taken from your investment to cover different types of costs. These amounts depend on how much you invest, how long you hold the product [and how well the product does (where applicable)]. The amounts shown here are illustrations based on an example investment amount and different possible investment periods.
We have assumed:
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If you [exit] after 1 year (where applicable) |
If you [exit] after [1/2 recommended holding period] (where applicable) |
If you [exit] after [recommended holding period] |
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Total costs |
[] EUR |
[] EUR |
[] EUR |
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Annual cost impact (*1) |
[] % |
[] % each year |
[] % each year |
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(*1)
‘This illustrates how costs reduce your return each year over the holding period. For example it shows that if you exit at the recommended holding period your average return per year is projected to be [] % before costs and [] % after costs.’ (Where applicable): ‘We may share part of the costs with the person selling you the product to cover the services they provide to you. (Where applicable) [They will inform you of the amount].’ (Where applicable): ‘These figures include the maximum distribution fee that the person selling you the product may charge ([] % of amount invested/[] EUR). This person will inform you of the actual distribution fee.’; |
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Table 1 for PRIIPs referred to in point (b) of Article 13
The PRIIP manufacturer shall include the following headings, narratives and the table 1 showing the aggregated cost figures in monetary and percentage terms specified in points 61 and 62 of Annex VI with the holding periods referred to in point 90 of that Annex and providing a split between the costs of the PRIIP other than the costs of the underlying investment options (‘insurance contract’) and the range of costs of the underlying investment options (‘investment options’):
‘ Costs over time
The tables show the amounts that are taken from your investment to cover different types of costs. These amounts depend on how much you invest, how long you hold the product [and how well the product does (where applicable)]. The amounts shown here are illustrations based on an example investment amount and different possible investment periods.
We have assumed:
[Statement indicating that the total costs to the retail investor consist of a combination of the costs of the PRIIP other than the costs of the underlying investment options and the investment option costs and vary on the basis of the underlying investment options]’
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If you [exit] after 1 year (where applicable) |
If you [exit] after [1/2 recommended holding period] (where applicable) |
If you [exit] after [recommended holding period] |
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Total costs |
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— Insurance contract — Investment options |
[] EUR [] – [] EUR |
[] EUR [] – [] EUR |
[] EUR [] – [] EUR |
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Annual cost impact (*1) |
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— Insurance contract — investment options |
[] % [] – [] % |
[] % each year [] – [] % each year |
[] % each year [] – [] % each year |
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(*1)
‘This illustrates how costs reduce your return each year over the holding period. For example it shows that if you exit at the recommended holding period your average return per year is projected to be [] % before costs and [] % after costs.’ (Where applicable): ‘We may share part of the costs with the person selling you the product to cover the services they provide to you. (Where applicable) [They will inform you of the amount.]’ (Where applicable): ‘These figures include the maximum distribution fee that the person selling you the product may charge ([] % of amount invested/[] EUR). This person will inform you of the actual distribution fee.’ |
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Table 1 for PRIIPs referred to in point 76c of Annex VI (Autocallables)
For PRIIPs referred to in point 76c of Annex VI, the heading, narrative and table 1 ‘Costs over Time’ shall be the following:
‘ Costs over time
The tables show the amounts that are taken from your investment to cover different types of costs. These amounts depend on how much you invest, how long you hold the product [and how well the product does (where applicable)]. The amounts shown here are illustrations based on an example investment amount and different investment periods.
The duration of this product is uncertain as it may terminate at different times depending on how the market evolves. The amounts shown here consider two different scenarios (early call and maturity). In case you decide to exit before the product ends, exit costs may apply in addition to the amounts shown here.
We have assumed:
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If the product is called at the first possible date [] |
If the product reaches maturity |
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Total costs |
[] EUR |
[] EUR |
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Annual cost impact (*1) |
[] % |
[] % each year |
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(*1)
‘This illustrates how costs reduce your return each year over the holding period. For example, it shows that if you exit at maturity your average return per year is projected to be [] % before costs and [] % after costs.’ (Where applicable): ‘We may share part of the costs with the person selling you the product to cover the services they provide to you. (Where applicable) [They will inform you of the amount.]’ (Where applicable): ‘These figures include the maximum distribution fee that the person selling you the product may charge ([] % of amount invested/[] EUR). This person will inform you of the actual distribution fee.’ |
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Table 2 for all PRIIPs except those referred to in point (b) of Article 13
The PRIIP manufacturer shall include a breakdown of costs according to the classification referred to in points 64 to 69 of Annex VI, using the headings and table 2 below.
A very brief description of the nature of each type of the costs shall be included. This shall include a numeric indicator (monetary amount or percentage) and the basis used for the calculation where this can be presented in simple terms that are likely to be understood by the type of retail investor to whom the PRIIP is intended to be marketed. The description shall be based on one or more of the examples included in the table below, unless these are not applicable.
‘ Composition of Costs
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One-off costs upon entry or exit |
(PRIPs): If you [exit] after [1 year/recommended holding period (if less than 1 year)] (Insurance based investment products): Annual cost impact if you [exit] after [recommended holding period] |
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Entry costs |
[Describe nature in no more than 300 characters. Examples: — ‘[] % of the amount you pay in when entering this investment’ — ‘[] % of the first [] premiums you pay’ — ‘These costs are already included in the [price/premiums] you pay’ — ‘This includes distribution costs of [[] % of amount invested/[] EUR]. [This is the most you will be charged]. [The person selling you the product will inform you of the actual charge]’ — ‘We do not charge an entry fee’] |
[Up to] [] EUR (PRIPs) or [] % (IBIPs) |
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Exit costs |
[Describe nature in no more than 300 characters. Examples: — ‘[] % of your investment before it is paid out to you’ — ‘We do not charge an exit fee for this product, [but the person selling you the product may do so]’ (Where exit costs only apply in specific circumstances) – ‘These costs only apply if (explain circumstances or an example in maximum 200 characters)’ For insurance-based investment products where exit costs only apply before exit at the recommended holding period, the column to the right shall state ‘N/A’ and the following statement shall be included in this column in addition to the descriptions above: ‘Exit costs are stated as ‘N/A’ in the next column as they do not apply if you keep the product until the recommended holding period’ |
[] EUR (PRIPs) or [] % (IBIPs) |
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Ongoing costs [taken each year] |
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Management fees and other administrative or operating costs |
[Describe basis in no more than 150 characters. Example: ‘[] % of the value of your investment per year’]. This is an estimate based on actual costs over the last year. |
[] EUR (PRIPs) or [] % (IBIPs) |
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Transaction costs |
[] % of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the underlying investments for the product. The actual amount will vary depending on how much we buy and sell. |
[] EUR (PRIP) or [] % (IBIPs) |
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Incidental costs taken under specific conditions |
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Performance fees [and carried interest] |
[[Describe in no more than 300 characters]. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years.] or [There is no performance fee for this product]. |
[] EUR (PRIP) or [] % (IBIPs) |
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(Where applicable): ‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’ |
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For PRIIPs offering a range of options for investment, PRIIP manufacturers shall use the tables 1 and 2 of this Annex applying to all PRIIPs except those referred to in Article 13, point (b) and point 76c of Annex VI for the presentation of the costs, showing for the figures in each table, as relevant, the range of the costs.
For PRIIPs with a recommended holding period of less than one year, instead of ‘Annual cost impact’, the label of the cost ratio in percentage terms in tables 1 and 2 shall be ‘Cost impact’ and the footnote under the table 1 shall state the following ‘This illustrates the effect of costs over a holding period of less than one year. This percentage cannot be directly compared to the cost impact figures provided for other PRIIPs’.
For PRIIPs where cost ratios in percentage are calculated using the notional value the following footnote shall be added below the table: ‘This illustrates costs in relation to the notional value of the PRIIP’.’
Table 2 for PRIIPs referred to in point (b) of Article 13
The PRIIP manufacturer shall include a breakdown of costs according to the classification referred to in points 64 to 69 of Annex VI, using the headings and table 2 below. Where applicable for the type of cost, a split of costs shall be shown between the costs of the PRIIP other than the costs of the underlying investment options (‘insurance contract’) and the range of costs of the investment options (‘investment options’).
A very brief description of the nature of each type of the costs shall be included. This shall include a numeric indicator (fixed amount or percentage) and the basis used for the calculation where this can be presented in simple terms that are likely to be understood by the type of retail investor to whom the PRIIP is intended to be marketed. The description shall be based on one or more of the examples included in the table below, unless these are not applicable.
‘ Composition of Costs
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One-off costs upon entry or exit |
Annual cost impact if you [exit] after [recommended holding period] |
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Entry costs |
[Describe nature in no more than 300 characters. Examples: — ‘[] % of the amount you pay in when entering this investment’ — ‘[] % of the first [] premiums you pay’ — ‘These costs are already included in the [price/premiums] you pay’ — ‘This includes distribution costs of [[] % of amount invested/[] EUR]. [This is the most you will be charged]. [The person sellingyou the product will inform you of the actual charge]’ — ‘We do not charge an entry fee’] |
‘[] %’ or ‘Insurance contract [] % Investment option [] – [] %’ |
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Exit costs |
[Describe nature in no more than 300 characters. Examples: — ‘[] % of your investment before it is paid out to you’. — ‘We do not charge an exit fee for this product, [but the person selling you the product may do so]’. (Where exit costs only apply in specific circumstances) – ‘These costs only apply if (explain circumstances or an example in maximum 200 characters)’ For insurance-based investment products where exit costs only apply before exit at the recommended holding period, the column to the right shall state ‘N/A’ and the following statement shall be included in this column in addition to the descriptions above: ‘Exit costs are stated as ‘N/A’ in the next column as they do not apply if you keep the product until the recommended holding period.’ |
‘[] %’ or ‘Insurance contract [] % Investment option [] – [] %’ |
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Ongoing costs taken each year |
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Management fees and other administrative or operating costs |
[Describe basis in no more than 150 characters. Example: ‘[] % of the value of your investment per year’]. This is an estimate based on actual costs over the last year. |
‘[] %’ or ‘Insurance contract [] % Investment option [] – [] %’ |
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Transaction costs |
[] % of the value of your investment per year. This is an estimate of the costs incurred when we buy and sell the underlying investments for the product. The actual amount will vary depending on how much we buy and sell. |
‘[] %’ or ‘Insurance contract [] % Investment option [] – [] %’ |
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Incidental costs taken under specific conditions |
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Performance fees [and carried interest] |
[[Describe in no more than 300 characters]. The actual amount will vary depending on how well your investment performs. The aggregated cost estimation above includes the average over the last 5 years.] or [There is no performance fee for this product]. |
‘[] %’ or ‘Insurance contract [] % Investment option [] – [] %’ |
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(Where applicable): ‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’’ |
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