On July 1, 2010 the European Commission introduced a new
programme of legislative changes with respect to the investment
funds known as UCITS (Undertakings for Collective Investment in
Transferable Securities). These legislative changes are popularly
known as UCITS IV. The focus of this article will be the changes
introduced by virtue of Commission Regulation (EU) No 583/2010 (the
Regulation). This Regulation concerns the fund disclosure
documentation to be issued to investors in UCITS and in particular
the new methodologies being introduced regarding the calculation
and presentation of risk information in relation to all UCITS
funds.
The Key Investor Information Document (KID)
The driving force behind the concept of a KID is to cut away the
complexity of fund industry terminology from documentation
presented to retail clients and replace it with easy to understand
language. This will allow an investor to better assess the
essential elements of a UCITS. The concern
