Commission Delegated Regulation (EU) 2017/653 of 8 March 2017 supplementing Regulation (EU) No 1286/2014 of the European Parliament and of the Council on key information documents for packaged retail and insurance-based investment products (PRIIPs) by laying down regulatory technical standards with regard to the presentation, content, review and revision of key information documents and the conditions for fulfilling the requirement to provide such documents (Text with EEA relevance. )

• (c) the methodology to be used differs depending on the asset class and shall be determined as follows:
• (i) For the asset classes indicated in the table below, transaction costs shall be calculated as the average of the estimated cost of transaction (based on bid-ask spreads divided by two) for the relevant asset class under normal market conditions. To estimate the cost, one or more reference indexes shall be identified for each asset class. Then, the average bid-ask spreads of the underlying indexes shall be collected. The data collected shall refer to the closing bid-ask spread at the tenth business day of each month during the last year. The bid-ask spreads collected shall then be divided by two to obtain the estimated cost of transaction for each point in time. The average of those values is the estimated cost of transaction in each asset class under normal market conditions. Asset Classes Government bonds Government bonds and similar instruments developed market rating AAA-A Government bonds and similar instruments developed market different rating below A Government bonds emerging markets (hard and soft currency) Government bonds emerging markets (hard and soft currency) Investment grade corporate bonds Investment grade corporate bonds Other corporate bonds High yield corporate bonds
• (ii) For the asset classes indicated in the table below, transaction costs (including explicit costs and implicit costs) shall be estimated either by using comparable information or by adding estimates of explicit costs to estimates of half the bid-ask spread, using the methodology described in point (i). Asset Classes Liquidity Money market instruments (for the sake of clarity, money markets funds not included) Shares developed markets Large-cap shares (developed markets) Mid-cap shares (developed markets) Small-cap shares (developed markets) Shares emerging markets Large-cap shares (emerging markets) Mid-cap shares (emerging markets) Small-cap shares (emerging markets) Listed derivatives Listed derivatives
• (iii) For the asset classes indicated in the table below, the transaction cost is the average of the observed cost of transaction (based on bid-ask spreads divided by two) in this asset class under normal market conditions. When identifying the observed cost of transaction, results of a panel survey may be taken into account. Asset Classes OTC OTC Exotic options OTC Plain vanilla options OTC IRS, CDS and similar OTC Swaps and similar instruments (different from IRS, CDS and similar) OTC FX Forwards developed markets OTC FX Forwards emerging markets

• 22.Estimates of portfolio turnover for a PRIIP that has been operating for less than one year must be made on a consistent basis with the investment policy disclosed in the offering documents. Estimates of portfolio turnover for a PRIIP that has been operating for more than one year must be consistent with actual portfolio turnover.

• 23.For PRIIPs that have been operating for less than three years and that invest predominantly in assets other than assets as referred to in point 9 of this Annex, the PRIIP manufacturer shall estimate the transaction costs on the basis of the fair value method using comparable assets.

Low number of transactions and other similar cases

• 23a.By way of derogation from points 12 to 18a of this Annex, transaction costs may be calculated using the methodology set out in point 21(b) of this Annex where one or more of the following conditions is met:

• (a) a PRIIP undertook a very low number of transactions over the previous three years;

• (b) the total value for all transactions undertaken over the previous three years accounts for a very low percentage of the net asset value of the PRIIP;

• (c) the estimate of total transaction costs is not significant as compared to the estimate of the total costs.

Use of data prior to 31 December 2024

• 23b.Until 31 December 2024, transaction costs may be calculated using the methodology laid down in point 21 of this Annex for PRIIPs that are UCITS or AIFs for which a Member State applied by 31 December 2021 rules on the format and content of the key information document, as laid down in Articles 78 to 81 of Directive 2009/65/EC.

• 23c.Until 31 December 2024, where an insurance-based investment product invests in a UCITS or AIF as referred to in point 23b of this Annex, the transaction costs for those investments may be calculated using the methodology laid down in point 21 of this Annex.

Performance related fees

• 24.To calculate performance related fees, the following steps shall be taken:

• (a) compute the fees on the basis of historical data covering the last 5 years. The average annual performance fees shall be computed in percentage terms,

• (b) where a full performance fees history is not available because the fund/share class is new or the fund's terms have changed due to the introduction of the performance fee or the change of one of its parameters, the abovementioned method shall be adjusted according to the following steps:
• (i) take the relevant available history of the performance fees of the fund/share class;
• (ii) for any years for which data is not available, estimate the return of the fund/share class and, in case of a relative performance fee model, take into account the historical series of the benchmark/hurdle rate; for new funds, their return shall be estimated using the return of a comparable fund or of a peer group. The estimated return shall be gross of all the costs charged to the new fund. Therefore peer groups' returns need to be adjusted by adding the average relevant costs charged according to the rules of the new fund. For instance, in case of a new class with a different fee structure, the returns of this new class shall be adjusted taking into account the costs of the existing class;
• (iii) compute the fees from the beginning of the sample period, as required in point (a), until the date of availability of the actual performance fee data of the fund, applying the relevant algorithm to the abovementioned historical series;
• (iv) concatenate both performance fee series to one series over the full sample period as required in point (a);
• (v) compute the performance fees using the methodology referred to in point (a) (average of annual performance fees).

Carried interests

• 25.To calculate carried interests, the following steps shall be taken:

• (a) compute the fees on the basis of historical data covering the last 5 years. The average annual carried interests shall be computed in percentage terms;

• (b) where a full carried interests history is unavailable because the fund/share class is new or the fund's terms have changed due to the introduction of carried interests or the change of one of its parameters, the abovementioned method shall be adjusted according to the following steps:
• (i) take the relevant available history of the carried interests of the fund/share class;
• — for any years for which data is not available, estimate the return of the fund/share class,
• — for new funds, their return shall be estimated using the return of a comparable fund or of a peer group. The estimated return shall be gross of all the costs charged to the new fund. Therefore peer group's returns need to be adjusted by adding the average relevant costs charged according to the rules of the new fund. For instance, in case of a new class with a different fee structure, the returns of this new class shall be adjusted taking into account the costs of the existing class.
• (ii) compute the carried interests from the beginning of the sample period, as required in point (a), until the date of availability of the actual carried interests data of the fund, applying the relevant algorithm to the abovementioned historical series;
• (iii) concatenate both carried interests series to one series over the full sample period as required in point (a);
• (iv) compute the carried interests using the methodology referred to in point (a) (average of annual carried interests).

• 26.If no carried interests are taken throughout the investment, a warning needs to accompany the indication of zero carried interests in the composition of costs table in order to clarify that a payment of x % of the final return shall take place subsequently to the exit of the investment.

II.   LIST OF COSTS OF PRIPS OTHER THAN INVESTMENT FUNDS

Costs to be disclosed

One-off costs

• 27.A one-off cost is an entry and exit cost which include initial charges, commissions or any other amount paid directly by the retail investor or deducted from a payment received by or due to the retail investor.

• 28.One-off costs are borne by a PRIP other than an investment fund, whether they represent expenses necessarily incurred in its operation, or the remuneration of any party connected with it or providing services to it.

One-off entry costs and charges

• 29.One-off entry costs and charges include, but are not limited to, the following types that shall be taken into account in the cost amount to be disclosed for PRIPs other than investment funds:

• (a) sales commissions;

• (b) structuring costs, including market-making costs (spread) and settlement costs;

• (c) hedging costs (to ensure that the PRIIP manufacturer is able to replicate the performance of the derivative component of the structured product — these costs include transaction costs)

• (d) legal fees;

• (e) costs for capital guarantee;

• (f) implicit premium paid to the issuer.

One-off exit costs and charges

• 30.One-off exit costs and charges include, but are not limited to, the following types that shall be taken into account in the amount to be disclosed for PRIPs other than investment funds:

• (a) proportional fees;

• (b) bid-mid spread to sell the product and any explicit costs or penalties for early exit applicable. The estimation of the bid-mid spread shall be done in relation to the availability of a secondary market, to the market conditions and the type of product. In the situation where the PRIIP manufacturer (or a related third party) is the only available counterparty to buy the product on the secondary market, it shall estimate the exit costs to be added to the fair value of the product according to its internal policies;

• (c) contract-for-difference (CFD) related costs such as:
• (i) commissions charged by CFD providers — general commission or a commission on each trade — i.e. on opening and closing a contract;
• (ii) CFD trading such as bid-ask spreads, daily and overnight financing costs, account management fees and taxes which are not already included in the fair value.

Recurring Costs

• 31.Recurring costs are payments regularly deducted from all payments due to the retail investor or from the amount invested.

• 32.Recurring costs include all types of cost borne by a PRIP other than an investment fund whether they represent expenses necessarily incurred in its operation, or the remuneration of any party connected with it or providing services to it.

• 33.The following list is indicative but not exhaustive of the types of recurring charge that, where they are deducted or charged separately, shall be taken into account in the amount to be disclosed:

• (a) costs related to coupon payments;

• (b) costs of the underlying, if any.

Costs of PRIPs referred to in point 17 of Annex IV

• 34.One-off exit costs and charges are exchange fees, clearing fees and settlement fees where known.

• 35.Recurring costs are hedging costs borne under normal market conditions and stressed market conditions.

Calculation of implicit costs of PRIPs other than investment funds

• 36.For the purposes of the calculation of the implicit costs embedded in PRIPs, the PRIIP manufacturer shall refer to the issue price and, after the subscription period, to the price available to purchase the product on a secondary market.

• 37.The difference between the price and the fair value of the product is considered as an estimation of the total entry costs included in the price. If the PRIIP manufacturer is unable to distinguish the relevant implicit costs to be disclosed as referred to in point 29 of this Annex using the difference between the price and the fair value, it shall liaise with the issuer of the different components of the product, or the relevant body, in order to gather the relevant information on those costs.

• 38.Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit price) regardless of whether that price is directly observable or estimated using another valuation technique.

• 39.The fair value policy that governs the measurement of the fair value shall set a series of rules including in the following areas:

• (a) governance;

• (b) methodology for the calculation of the fair value.

• 40.The rules referred to in point 39 of this Annex shall aim at outlining a valuation process that:

• (a) complies with the applicable accounting standards, in relation to fair value;

• (b) makes sure that internal pricing models for PRIPs are consistent with the methodologies, modelling and standards used by the PRIIP manufacturer to value its own portfolio under the hypothesis that the product is available for sale or held for trading;

• (c) is consistent with the level of complexity of the product and the type of underlying;

• (d) takes into account the issuer credit risk and the uncertainty about the underlying;

• (e) sets the parameters to identify an active market in order to avoid risk mispricing that could lead in extreme cases to significantly inaccurate estimates;

• (f) maximises the use of relevant observable market inputs and minimizes the use of unobservable inputs.

• 41.The fair value of a structured product shall be determined on the basis of:

• (a) market prices, where available or efficiently formed;

• (b) internal pricing models using as an input market values which are indirectly connected to the product, derived from products with similar characteristics (comparable approach);

• (c) internal pricing models based on inputs which are not derived directly from market data for which estimations and assumptions must be formulated (mark-to-model approach).

• 42.If the fair value cannot be derived from market prices, it shall be calculated using a valuation technique that is able to represent properly the different factors affecting the product payoff structure making maximum use of market data.

• 43.The valuation technique referred to in point 42 of this Annex shall consider the following according to the complexity of the product:

• (a) the use of recent arm's length market transactions between knowledgeable, professional counterparties;

• (b) reference to the current market price of another instrument that is substantially the same;

• (c) the use of an appropriate discounted cash-flow model where the likelihood of each cash flow is determined using an appropriate model of asset price evolution.

• 44.In the case of subscription products, the fair value shall be calculated on the date when the product terms are determined. This valuation date shall be close to the beginning of the subscription period. Where long offering periods or high market volatility exists, a criterion to update cost information shall be defined.

• 45.Where preliminary terms are used, costs shall be calculated by using the minimum terms of the product.

• 46.Where variable subscription prices are used, a procedure on how to incorporate and disclose the cost effect of the varying subscription price shall be defined.

III.   LIST OF COSTS OF INSURANCE-BASED INVESTMENT PRODUCTS

Costs to be disclosed

One-off costs

• 47.A one-off cost is an entry and exit cost which includes initial charges, commissions or any other amount paid directly by the retail investor or deducted from the first payment or from a limited number of payments due to the retail investor or from a payment upon redemption or termination of the product.

• 48.One-off costs are borne by an insurance-based investment product, whether they represent expenses necessarily incurred in its operation, or the remuneration of any party connected with it or providing services to it.

• 49.One-off costs include, but are not limited to, the following types of entry costs and charges that shall be taken into account in the amount to be disclosed for insurance-based investment products:

• (a) structuring or marketing costs;

• (b) acquisition, distribution, sales costs;

• (c) processing/operating costs (including costs for the management of the insurance cover);

• (d) cost part of biometric risk premiums referred to in point 59 of this Annex;

• (e) costs of holding required capital (up front part to be disclosed insofar as they are charged).

Recurring costs

• 50.Recurring costs are payments regularly deducted from all payments from the retail investor or from the amount invested or amounts that are not allocated to the retail investor according to a profit sharing mechanism.

• 51.The recurring costs include all types of costs borne by an insurance-based investment product whether they represent expenses necessarily incurred in its operation, or the remuneration of any party connected with it or providing services to it.

• 52.The following list is indicative but not exhaustive of the types of recurring charge that shall be taken into account in the amount of the ‘Other ongoing costs’ in table 2 of Annex VII:

• (a) structuring or marketing costs;

• (b) acquisition, distribution, sales costs;

• (c) processing/operating costs (including costs for the management of insurance cover);

• (d) cost part of biometric risk premiums referred to in point 59 of this Annex;

• (e) other administrative costs;

• (f) costs of holding capital (recurring part to be disclosed insofar as they are charged);

• (g) any amount implicitly charged on the amount invested such as the costs incurred for the management of the investments of the insurance company (deposit fees, costs for new investments, etc.);

• (h) payments to third parties to meet costs necessarily incurred in connection with the acquisition or disposal of any asset owned by the insurance-based investment product (including transaction costs as referred to in points 7 to 23 of this Annex).

• 53.Where an insurance-based investment product invests a part of its assets in UCITS or AIFs, in a PRIIP other than UCITS or AIFs or in an investment product other than a PRIIP, points 5(l), 5(m) and 5(n) of this Annex shall be applied respectively.

Cost disclosure of the biometric risk premium of insurance based investment products

Costs part of biometric risk premiums

• 54.Biometric risk premiums are those premiums paid directly by the retail investor or deducted from the amounts credited to the mathematical provision or from the participation bonus of the insurance policy, that are intended to cover the statistical risk of benefit payments from insurance coverage.

• 55.The fair value of biometric risk premiums is the expected present value, according to the interest rates referred to in point 71(a) of this Annex, of the future benefit payments from insurance coverage taking into account the following:

• (a) best estimate assumptions on these benefit payments derived from the individual risk profile of the portfolio of the individual manufacturer;

• (b) other payoffs related to insurance cover (rebates on biometric risk premiums paid back to the the retail investors, increase of benefit payments, reduction of future premiums, etc.) resulting from profit sharing mechanisms (legal and/or contractual).

• 56.Best estimate assumptions on future benefit payments from insurance coverage shall be set in a realistic way.

• 57.The estimated future benefit payments shall not include prudency margins or costs for the management of the insurance cover.

• 58.For manufacturers within the scope of Directive 2009/138/EC these best estimate assumptions shall be consistent with the respective assumptions used for the calculation of the technical provisions in the Solvency II balance sheet.

• 59.The cost part of biometric risk premiums is the difference between biometric risk premiums charged to the retail investor referred to in point 54 of this Annex and the fair value of the biometric risk premiums referred to in point 55 of this Annex.

• 60.A PRIIP manufacturer may include the full biometric risk premiums in the calculation of one-off costs or recurring costs in the place of the cost part of those premiums.

PART 2

Summary cost indicators and compound effect of the costs

I. AGGREGATED COST FIGURES TO BE INCLUDED IN TABLE 1 ‘COSTS OVER TIME’

• 61.The total costs shall be all the costs known by the PRIIP manufacturer, including exit costs where applicable, for the relevant holding period and shall be calculated as follows:

• (a) for investment funds the sum of the costs as referred to in points 1 and 2 of this Annex plus the sum of the costs as referred to in points 4 and 6 of this Annex;

• (b) for PRIPs other than investment funds, except PRIIPs referred in point 30 of Annex IV, the sum of the costs as referred to in points 27 and 28 of this Annex plus the sum of the costs as referred to in points 31 and 32 of this Annex;

• (c) for PRIIPs referred to in point 30 of Annex IV, the sum of the costs as referred to in points 34 and 35 of this Annex;

• (d) for insurance-based investment products, the sum of the costs as referred to in points 47 and 48 plus the sum of the costs as referred to in points 50 and 51 of this Annex.

• 62.The table ‘Costs over time’ shall also include aggregated summary cost indicators of the PRIIP calculated as the reduction of the yield due to total costs calculated in accordance with points 70, 71 and 72 of this Annex.

• 63.When an assumption on the performance of the PRIIP is needed for the calculation of the cost figures (for figures in monetary or percentage terms), the performance of the PRIIP used in the calculation shall be determined in accordance with point 71 of this Annex.

II.   SUMMARY COST INDICATORS PER TYPE OF COST TO BE INCLUDED IN TABLE 2 ‘COMPOSITION OF COSTS’

One-off costs and one-off costs indicators

• 64.For the calculation of the entry and exit costs indicators the costs to be considered shall be those identified as entry or exit costs in accordance with Part 1 of this Annex. For insurance-based investment products, the entry and exit costs indicators of the PRIIP shall be the reduction of the annual yield due to entry and exit costs considering the PRIIP is held until the recommended holding period, calculated in accordance with points 70, 71 and 72 of this Annex. For PRIPs, the entry and exit costs indicators shall be the costs in monetary units if the product is held for one year (or for the recommended holding period if shorter), calculated assuming a net performance of 0 %.

Recurring costs indicators: Transaction costs and other recurring costs

• 65.The recurring costs indicators of the PRIIP shall be calculated as follows:

• (a) for insurance based investment products, as the reduction of the annual yield due to those costs considering the PRIIP is held until the recommended holding period calculated in accordance with points 70, 71 and 72 of this Annex;

• (b) for PRIPs, as the amount of ongoing costs in monetary units if the product is held for one year (or for the recommended holding period if shorter), calculated assuming a net performance of 0 %.

• 66.For the calculation of the transaction costs indicator, the following costs shall be considered:

• (a) for investment funds, the transaction costs referred to in points 7 to 23c of this Annex;

• (b) for PRIPs other than investment funds, except PRIIPs referred in point 30 of Annex IV, the costs referred to in point 29(c) of this Annex;

• (c) for insurance-based investment products, the costs referred to in point 52(h) of this Annex.

• 67.For the calculation of the other recurring costs indicator (referred to in Annex VII as ‘management fees and other administrative or operating costs’), the costs to be considered are the difference between the total costs pursuant to point 61 of this Annex and the sum of the one-off costs indicator, pursuant to point 64 of this Annex, plus the transaction costs indicator, pursuant to point 66 of this Annex, plus the incidental costs indicators, pursuant to points 68 and 69 of this Annex.

Incidental costs and incidental costs indicators (performance fees and carried interests)

• 68.The incidental costs indicator of the PRIIP shall be calculated as follows:

• (a) for insurance-based investment products, as the reduction of the annual yield due to performance fees or carried interest or both considering the PRIIP is held until the recommended holding period calculated in accordance with points 70, 71 and 72 of this Annex;

• (b) for PRIPs, as those costs in monetary units if the PRIIP is held for one year (or for the recommended holding period if shorter), calculated assuming a net performance of 0 %.

• 69.For the calculation of the performance fees the costs pursuant to point 6(a) of this Annex shall be considered for investment funds. For the calculation of the carried interests, the costs pursuant to point 6(b) of this Annex shall be considered for investment funds.

III.   CALCULATION OF THE COST FIGURES

Calculation of summary cost indicator

• 70.The reduction in yield mentioned in parts I and II of this Annex shall be calculated using amounts consistent with those specified in points 90 and 91 of this Annex. It shall be calculated as the difference between two percentages i and r where r is the annual internal rate of return in relation to gross payments by the retail investor and estimated benefit payments to the retail investor for the relevant holding period, and i is the annual internal rate of return for the respective cost free scenario.

• 71.The estimation of future benefit payments for the calculation of costs pursuant to point 70 of this Annex shall be based on the following assumptions:

• (a) for PRIIPs as referred to in point 30 of Annex IV, and for all PRIIPs for the cost indicators showing the case that the PRIIP is held for one year or less, a standardised net performance of 0 % shall be assumed;

• (b) except where point (a) applies, the performance of the PRIIP shall be calculated applying the methodology and the underlying hypothesis used for the estimation of the moderate scenario from the performance scenarios section of the key information document;

• (c) the benefit payments shall be estimated under the assumption that all costs included in the total costs pursuant to point 61 of this Annex are deducted.

• 72.For the purpose of the calculation of the cost free scenario as referred to in point 70 of this Annex the following shall apply:

• (a) for the calculation of i either gross payments by the retail investor from the calculation of r shall be reduced by the costs to be disclosed or the projected benefit payments to the retail investor from the calculation of r shall be increased under the assumption that the amounts of the costs to be disclosed had additionally been invested. Then i is the annual internal rate of return in relation to these adjusted payments by and to the retail investor;

• (b) where costs to be disclosed can be expressed as a constant percentage of the value of the assets they may be disregarded in the calculation described in point 72(a) of this Annex and instead be added to the percentage of the annual internal rate of return i for the respective cost free scenario afterwards.

Specific requirements for PRIPs other than investment funds

• 73.For the purpose of the calculation of the cost free scenario as referred to in point 70 of this Annex for PRIPs other than investment funds, gross payments by the retail investor from the calculation of r, as referred to in point 72 of this Annex, shall be reduced by the costs to be disclosed.

Specific requirements for insurance-based investment products

• 74.For the purpose of the calculations described in points 70 to 72 of this Annex, it shall be assumed that, for insurance-based investment products, no payments resulting from insurance coverage occur during the holding period. That is to say, the calculation of the summary cost indicator shall be solely based on estimated endowment benefit payments.

• 75.To the extent recurring and one-off costs are covered by explicit costs that are a fixed part of the premium calculation of the product the calculation of recurring and one-off costs shall be based on these explicit costs.

• 76.For profit participation for insurance based investment products the following shall apply:

• (a) when calculating recurring costs and one-off costs for insurance-based investment products amounts retained from the investment return through profit sharing mechanisms shall be considered as costs;

• (b) where a part of the costs is returned to retail investors by separate cost bonuses this shall be considered as a cost rebate that reduces cost deductions provided:
• (i) that the cost bonuses are declared separately from other parts of the participation bonus and are intended for refunding parts of the costs by the contractual terms of the product.
• (ii) that the PRIIP manufacturer can substantiate on the basis of sound actuarial methods that expected future cost bonuses are covered by expected future profits that result from prudent assumptions on future costs.

Specific requirements for PRIIPs with a recommended holding period of less than 1 year

• 76a.The cost indicators in percentage terms shall be calculated considering the aggregated cost in the period divided by the investment amount and a footnote shall be added to explain that calculation and warn about the lack of comparability with annual cost indicators in percentage terms shown for other PRIIPs.

Specific requirements for PRIIPs that are forward contracts, future contracts, contracts for difference, or swaps

• 76b.The cost indicators in percentage terms shall be calculated considering the notional amount of the contract and a footnote shall be added to explain that calculation.

Specific requirements for PRIIPs that may be called or cancelled automatically before the end of the recommended holding period if certain predefined conditions are met

• 76c.Cost figures shall be shown assuming two different scenarios:

• (a) the PRIIP is called at the first possible date;

• (b) the PRIIP reaches maturity.

The cost figures shall be calculated assuming a performance coherent with each scenario.

Anti-double counting principle

• 77.If one type of cost is covered by two or more types of costs as referred to in this Annex, that type of cost shall only be accounted for once in the calculation of the indicators (ratios) which are based on it.

Other specifications

• 78.The cost figures in monetary amounts shall be rounded to the nearest euro. The cost indicators in percentage terms shall be expressed to one decimal place.

• 79.The cost figures shall be calculated at least once a year.

• 80.The cost figures shall be based on the most recent cost calculations determined by the PRIIP manufacturer. Without prejudice to point 77 of this Annex, the costs shall be assessed on an ‘all taxes included’ basis.

For investment funds, the following shall apply:

• (a)a separate calculation performed for each share class, but if the units of two or more classes rank pari passu, a single calculation may be performed for them;

• (b)in the case of a fund which is an umbrella, each constituent compartment or sub- fund shall be treated separately for the purpose of this Annex, but any charges attributable to the fund as a whole apportioned among all of the sub-funds on a basis that is fair to all investors.

• 81.Apart from the first calculation for a new PRIIP, and if not stated otherwise, the ratios shall be calculated at least once a year, on an ex-post basis. Where it is considered unsuitable to use the ex-post figure because of a material change, an estimate may be used instead until reliable ex-post figures reflecting the impact of the material change become available.

• 82.The ex-post figures shall be based on recent cost calculations which the PRIIP manufacturer has determined on reasonable grounds to be appropriate for that purpose. The figures may be based on the costs set out in the PRIIP’s statement of operations published in its latest annual or half-yearly report, if that statement is sufficiently recent. If it is not sufficiently recent, a comparable calculation based on the costs charged during a more recent 12-month period shall be used instead.

• 83.Information about the ratios that were applicable during previous years/periods shall be published at the location which is specified in the key information document as the general source of further information for investors who require it.

• 84.Where the costs attributable to an underlying UCITS or AIF are to be taken into account the following shall apply:

• (a) the cost indicator of each underlying UCITS or AIF shall be pro-rated according to the proportion of the PRIIP’s net asset value which that UCITS or AIF represents at the relevant date, this being the date at which the PRIIP’s figures are taken;

• (b) all the pro-rated figures shall be added to the total cost figure of the investing PRIIP itself, thus presenting a single total.

Calculation methodology for new PRIIPs

• 85.In place of ex-post data, estimates shall be used in the calculation of the different types of costs. Such estimates shall be carried out by adopting as proxies either a comparable PRIIP or a peer group.

• 86.For PRIIPs which charge a fixed all-inclusive fee, that fee shall be used provided it includes all costs to be presented under the PRIIPs cost disclosure requirements.

• 87.For PRIIPs which set a cap or maximum on the amount that can be charged, and provided it includes all costs to be presented under the PRIIPs cost disclosure requirements, that cap or maximum shall be used instead so long as the PRIIP manufacturer gives a commitment to respect the published figure and to absorb any costs that would otherwise cause it to be exceeded.

• 88.If, in the PRIIP manufacturer's opinion, expressing a figure to two decimal places would be likely to suggest a spurious degree of accuracy to investors, it shall be sufficient to express that figure to one decimal place.

• 89.The PRIIP manufacturer shall ensure that the accuracy of the estimated figure is kept under review. The PRIIP manufacturer shall determine when it is appropriate to begin using ex-post figures rather than an estimate; but in any case it shall, no later than 12 months after the date on which the PRIIP was first offered for sale in any Member State, review the accuracy of the estimate by calculating a figure on an ex-post basis.

Common requirements to all types of PRIIPs

• 90.The tables referred to in Article 5 shall contain an indication of the costs known by the PRIIP manufacturer in monetary and percentage terms for the case that the retail investor invests, respectively 10 000 EUR in the PRIIP (for all PRIIPs except those that are regular premium or regular payment products), or 1 000 EUR yearly (for regular premium or payment PRIIPs). The cost figures shall be shown for different holding periods, including the recommended holding period, as follows:

• (a) for PRIIPs with a recommended holding period of one year or less, only costs in case of exit at the end of the recommended holding period shall be shown;

• (b) for PRIIPs with a recommended holding period longer than one year and shorter than 10 years, costs shall be shown considering exit at the end of the first year and at the end of the recommended holding period;

• (c) for PRIIPs with a recommended holding period of 10 years or more an additional holding period shall be shown, disclosing cost figures in case of exit at half the recommended holding period rounded to the end of the nearest year;

• (d) where a PRIIP does not allow exit before the recommended holding period, or where a PRIIP is considered not to have an alternative liquidity facility promoted by the PRIIP manufacturer or a third party, or where there is an absence of liquidity arrangements, or for those PRIIPs as referred to in point 30 of Annex IV, costs may be shown at the end of the recommended holding period only.

• 91.Where the currency of the PRIIP is not in Euros, an amount of a similar magnitude to those set out in point 90 of this Annex and which is cleanly divisible by 1 000 shall be used.

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:

— [In the first year] you would get back the amount that you invested (0 % annual return). [For the other holding periods we have assumed the product performs as shown in the moderate scenario]

— [EUR 10 000 /1 000 per year] is invested’

	*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]
Total costs	[] EUR	[] EUR	[] EUR
Annual cost impact [^E0014]	[] %	[] % each year	[] % each year
(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.’;	(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.’;	(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.’;	(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.’;

‘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.’

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:

— In the first year you would get back the amount that you invested (0 % annual return). For the other holding periods we have assumed the product performs as shown in the moderate scenario

— [EUR 10 000 /1 000 per year] is invested

[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]’

	*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]
Total costs	Total costs	Total costs	Total costs
— Insurance contract — Investment options	[] EUR [] – [] EUR	[] EUR [] – [] EUR	[] EUR [] – [] EUR
Annual cost impact [^E0015]	Annual cost impact [^E0015]	Annual cost impact [^E0015]	Annual cost impact [^E0015]
— Insurance contract — investment options	[] % [] – [] %	[] % each year [] – [] % each year	[] % each year [] – [] % each year
(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.’	(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.’	(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.’	(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.’

‘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.’

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:

— [EUR 10 000 /1 000 per year] is invested

— a performance of the product that is consistent with each holding period shown.’

	If the product is called at the first possible date []	If the product reaches maturity
Total costs	[] EUR	[] EUR
Annual cost impact [^E0016]	[] %	[] % each year
(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.’	(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.’	(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.’

‘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.’

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

One-off costs upon entry or exit	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]
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)
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)
Ongoing costs [taken each year]	Ongoing costs [taken each year]
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)
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)
Incidental costs taken under specific conditions	Incidental costs taken under specific conditions
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)
(Where applicable):  ‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’	(Where applicable):  ‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’	(Where applicable):  ‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’

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

One-off costs upon entry or exit	One-off costs upon entry or exit	Annual cost impact if you [exit] after [recommended holding period]
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 [] – [] %’
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 [] – [] %’
Ongoing costs taken each year	Ongoing costs taken each year
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 [] – [] %’
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 [] – [] %’
Incidental costs taken under specific conditions	Incidental costs taken under specific conditions
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 [] – [] %’
(Where applicable):  ‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’’	(Where applicable):  ‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’’	(Where applicable):  ‘Different costs apply depending on the investment amount [explain circumstances or use an example in maximum 150 characters]’’

ANNEX VIII

CONTENT AND PRESENTATION OF PAST PERFORMANCE INFORMATION

Definitions

• 1.For the purpose of presenting information on past performance the following definitions shall apply:

• (a) ‘UCITS’ means a UCITS authorised in accordance with Article 5 of Directive 2009/65/EC which:
• (i) is a Category 2 PRIIP as set out in point 5 of Annex II; and
• (ii) does not provide retail investors, at certain predetermined dates, with algorithm-based payoffs that are linked to the performance, or to the realisation of price changes or other conditions, of financial assets, indices or reference portfolios or have similar features;

• (b) ‘AIF’ means an AIF as defined in Article 4(1), point (a) of Directive 2011/61/EU which:
• (i) is a Category 2 PRIIP as set out in point 5 of Annex II;
• (ii) is an open-ended AIF as referred to in Article 1(2) of Commission Delegated Regulation (EU) No 694/2014 ([^E0017]); and
• (iii) does not provide retail investors, at certain predetermined dates, with algorithm-based payoffs that are linked to the performance, or to the realisation of price changes or other conditions, of financial assets, indices or reference portfolios or have similar features;

• (c) ‘unit-linked insurance-based investment product’ means a unit-linked insurance- based investment product which:
• (i) is a Category 2 PRIIP as set out in point 5 of Annex II;
• (ii) has potential early exit or redemption possibilities prior to the recommended holding period, which are not subject to significant limiting conditions;
• (iii) provides benefits that are directly linked to the value of assets which are divided into units; and
• (iv) does not provide retail investors, at certain predetermined dates, with algorithm-based payoffs that are linked to the performance, or to the realisation of price changes or other conditions, of financial assets, indices or reference portfolios or have similar features.

Past performance calculation for UCITS or AIFs

• 2.The calculation of past performance figures shall be based on the net asset value of the UCITS or AIFs, and they shall be calculated on the basis that any distributable income of the fund has been reinvested.

Use of ‘simulated’ data for past performance for UCITS or AIFs

• 3.A simulated performance record for the period before data was available shall only be permitted in the following cases, provided that its use is fair, clear and not misleading:

• (a) a new share class of an existing UCITS or AIF or investment compartment may simulate its performance by taking the performance of another class, provided the two classes do not differ materially in the extent of their participation in the assets of the UCITS or the AIF;

• (b) a feeder UCITS or AIF may simulate its performance by taking the performance of its master UCITS or AIF, provided that one of the following conditions is met;
• (i) the feeder UCITS or AIF’s strategy and objectives do not allow it to hold assets other than units of the master UCITS or AIF and ancillary liquid assets;
• (ii) the feeder UCITS or AIF’s characteristics do not differ materially from those of the master UCITS or AIF.

Past performance calculation for unit-linked insurance-based investment products

• 4.The calculation of past performance as described in point 2 of this Annex shall apply mutatis mutandis to unit-linked insurance-based investment products. The calculation shall be consistent either with the explanation of the impact of the biometric risk premium or the cost part of the biometric risk premium on the investment return as referred to in Article 2(4).

Presentation of past performance for UCITS or AIFs

• 5.The information about the past performance of the UCITS or the AIF shall be presented in a bar chart covering the performance of the UCITS or the AIF for the last 10 years. The size of the bar chart shall allow for legibility.

• 6.UCITS or AIFs with performance of less than five complete calendar years shall use a presentation covering the last five years only.

• 7.Any year for which data is not available shall be shown as blank with no annotation other than the date.

• 8.For UCITS or AIFs which do not yet have performance data for one complete calendar year, a statement shall be included explaining that there is insufficient data to provide a useful indication of past performance to retail investors.

• 9.The bar chart layout shall be supplemented by the following statements, which shall appear prominently:

• (a) a warning about the limited value of past performance as a guide to future performance, using the following statement in bold letters: ‘ Past performance is not a reliable indicator of future performance. Markets could develop very differently in the future. It can help you to assess how the fund has been managed in the past ’;

• (b) a narrative explaining what is shown which shall be included above the bar chart and shall state in bold letters: ‘ This chart shows the fund’s performance as the percentage loss or gain per year over the last [x] years. ’;

• (c) if applicable, a product specific warning about the lack of representativeness of the past in accordance with point 15 of this Annex or if relevant other reasons with a maximum of 150 characters in plain language;

• (d) a brief explanation of which charges and fees have been included or excluded from the calculation of past performance where relevant. This shall not apply to UCITS or AIFs which do not have entry or exit charges. [An example narrative: ‘ Performance is shown after deduction of ongoing charges. Any entry and exit charges are excluded from the calculation. ’];

• (e) an indication of the year in which the fund, compartment or share class came into existence;

• (f) if relevant an indication of the currency in which past performance has been calculated.

• 10.The information shall not contain any record of past performance for any part of the current calendar year.

Use of a benchmark alongside the past performance

• 11.Where the section entitled ‘What is this product?’ of the key information document makes reference to a benchmark, a bar showing the performance of that benchmark shall be included in the chart alongside each bar showing past performance of the UCITS or the AIFs. This applies for UCITS or AIFs tracking a benchmark as well as for those managed in reference to a benchmark. A UCITS or AIF is deemed to be managed in reference to a benchmark, where the benchmark index plays a role in the management of the UCITS or AIF, such as for portfolio composition and/or performance measures.

• 12.For UCITS or AIFs which do not have past performance data over the required five or 10 years, the benchmark shall not be shown for years in which the UCITS or AIF did not exist.

• 13.If the UCITS or AIF is managed in reference to a benchmark as referred to in point 11 of this Annex, the narratives in point 9 of this Annex shall be supplemented as follows in bold letters:

‘ This chart shows the fund’s performance as the percentage loss or gain per year over the last [] years against its benchmark. ’

‘ It can help you to assess how the fund has been managed in the past and compare it to its benchmark. ’

Presentation of the bar chart

• 14.The bar chart presenting past performance shall comply with the following criteria:

• (a) the scale of the Y-axis of the bar chart shall be linear, not logarithmic;

• (b) the scale shall be adapted to the span of the bars shown and shall not compress the bars so as to make fluctuations in returns harder to distinguish;

• (c) the X-axis shall be set at the level of 0 % performance;

• (d) a label shall be added to each bar indicating the return in percentage that was achieved;

• (e) past performance figures shall be rounded to one decimal place.

Impact and treatment of material changes

• 15.Where a material change occurs in the UCITS’ or AIF’s objectives and investment policy during the period displayed in the bar chart referred to in points 5 to 10 of this Annex, the UCITS’ or AIF’s past performance prior to that material change shall continue to be shown.

• 16.The period prior to the material change referred to in point 15 of this Annex shall be indicated on the bar chart and labelled with a clear warning that the performance was achieved under circumstances that no longer apply.

Use of ‘simulated’ data for past performance

• 17.In all cases where performance has been simulated in accordance with point 3 of this Annex, there shall be prominent disclosure on the bar chart that the performance has been simulated.

• 18.A UCITS or AIF changing its legal status but remaining established in the same Member State shall retain its performance record only where the competent authority of that Member State reasonably assesses that the change of status would not impact the UCITS’ or AIF’s performance.

• 19.In the case of mergers referred to in Article 2(1), points (p)(i) and (iii),) of Directive 2009/65/EC, only the past performance of the receiving UCITS shall be maintained.

• 20.Point 19 of this Annex shall apply mutatis mutandis in the case of mergers of AIFs.

Presentation of past performance of feeder UCITS or AIFs

• 21.The past performance presentation of feeder UCITS or AIF shall be specific to the feeder UCITS or AIF, and shall not reproduce the performance record of the master UCITS or AIF.

• 22.Point 21 of this Annex shall not apply where:

• (a) the feeder UCITS or AIF shows the past performance of its master UCITS or AIF as a benchmark; or

• (b) the feeder was launched as a feeder UCITS or AIF at a later date than the master UCITS or AIF, and where the conditions of point 3 of this Annex are satisfied, and where a simulated performance is shown for the years before the feeder existed, based on the past performance of the master UCITS or AIF; or

• (c) the feeder UCITS has a past performance record from before the date on which it began to operate as a feeder, its own record being retained in the bar chart for the relevant years, with the material change labelled as required by point 16 of this Annex.

Presentation of past performance of unit-linked insurance-based investment products

• 23.Points 5 to 16 of this Annex shall apply mutatis mutandis to unit-linked insurance-based investment products. The presentation shall be consistent either with the description of the impact of the biometric risk premium or the cost part of the biometric risk premium on the investment return referred to in Article 2(4).

[^E0001]: Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1).

[^E0002]: Directive (EU) 2016/97 of the European Parliament and of the Council of 20 January 2016 on insurance distribution (OJ L 26, 2.2.2016, p. 19).

[^E0003]: Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349).

[^E0004]: Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.6.2014, p. 84).

[^E0005]: Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349).

[^E0006]: Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (OJ L 302, 17.11.2009, p. 1).

[^E0007]: Commission Implementing Regulation (EU) 2016/1800 of 11 October 2016 laying down implementing technical standards with regard to the allocation of credit assessments of external credit assessment institutions to an objective scale of credit quality steps in accordance with Directive 2009/138/EC of the European Parliament and of the Council (OJ L 275, 12.10.2016, p. 19).

[^E0008]: Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1).

[^E0009]: Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 amending Directive 2009/65/EC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) as regards depositary functions, remuneration policies and sanctions (OJ L 257, 28.8.2014, p. 186).

[^E0010]: Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1).