Commission Delegated Regulation (EU) 2021/2268 of 6 September 2021 amending the regulatory technical standards laid down in Commission Delegated Regulation (EU) 2017/653 as regards the underpinning methodology and presentation of performance scenarios, the presentation of costs and the methodology for the calculation of summary cost indicators, the presentation and content of information on past performance and the presentation of costs by packaged retail and insurance-based investment products (PRIIPs) offering a range of options for investment and alignment of the transitional arrangement for PRIIP manufacturers offering units of funds referred to in Article 32 of Regulation (EU) No 1286/2014 of the European Parliament and of the Council as underlying investment options with the prolonged transitional arrangement laid down in that Article (Text with EEA relevance)

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ANNEX VI

Annex VI to Delegated Regulation (EU) 2017/653 is amended as follows:

• (1) in point 3, point (a) is replaced by the following:
• ‘(a) distribution fee, to the extent that the amount is known to the UCITS management company or AIFM; if the actual amount is not known to the UCITS management company or AIFM, the maximum of the possible known distribution costs for the specific PRIIP shall be shown;’;

• (2) point 5 is amended as follows:
• (a) in point (a), point (i) is replaced by the following:
• ‘(i) the UCITS management company or AIFM;’;
• (b) point (g) is replaced by the following:
• ‘(g) any costs of distribution or marketing, to the extent that the amount is known to the UCITS management company or AIFM; if the actual amount is not known to the UCITS management company or AIFM, the maximum of the possible known distribution costs for the specific PRIIP shall be shown;’;
• (c) points (j) and (k) are replaced by the following:
• ‘(j) payments to third parties to meet costs necessarily incurred in connection with the acquisition or disposal of any asset in the fund’s portfolio (including transaction costs as referred to in points 7 to 23c of this Annex);
• (k) the value of goods or services received by the UCITS management company or AIFM or any connected person in exchange for placing of dealing orders;’;
• (d) in point (l), point (i) is replaced by the following:
• ‘(i) where the underlying is a UCITS or AIF, its most recently available summary cost indicator figure shall be used, where necessary adjusted to show the actual distribution fee incurred; that figure shall be based either on the figure published by the UCITS or AIF or its operator or the UCITS management company or AIFM, or a figure calculated by a reliable third- party source if more up-to-date than the published figure;’;
• (e) in point (m), point (i) is replaced by the following:
• ‘(i) the most recently available summary cost indicator of the underlying PRIIP shall be included in the calculation, and, where necessary, adjusted to show the actual entry fee incurred;’;
• (f) point (q) is replaced by the following:
• ‘(q) implicit costs incurred by structured investment funds as referred to in Section II of this Annex, and in particular points 36 to 46 of this Annex;’;

• (3) in point 6, point (a) is replaced by the following:
• ‘(a) a performance–related fee payable to the UCITS management company or the AIFM or any investment adviser, including performance fees as referred to in point 24 of this Annex;’;

• (4) points 7 and 8 are replaced by the following:
• ‘7. Transaction costs shall be calculated on an annualised basis, based on an average of the transaction costs incurred by the PRIIP over the previous three years where the average is calculated from all transactions. Where the PRIIP has been operating for less than three years, transaction costs shall be calculated using the methodology set out in points 21, 22 and 23 of this Annex.
• 1. The aggregate transaction costs for a PRIIP shall be calculated as the sum of the transaction costs as calculated in accordance with points 8a to 23a of this Annex in the base currency of the PRIIP for all individual transactions undertaken by the PRIIP in the specified period. This sum shall be converted into a percentage by dividing by the average net assets of the PRIIP over the same period.’;

• (5) the following point 8a is inserted:
• ‘8a. A minimum of explicit transaction costs, as referred to in point 11a of this Annex, shall be disclosed.’;

• (6) point 10 is replaced by the following:
• ‘10. Estimates of transaction costs using the methodology described below in points 19 and 20 of this Annex shall be used for investments in other instruments or assets. Transaction costs associated with non-financial assets shall be calculated in accordance with point 20a of this Annex.’;

• (7) in point 11, the following point (c) is added:
• ‘(c) the anti-dilution benefit shall only be taken into account to the extent that the benefit does not take the total transaction costs below explicit transaction costs.’;

• (8) the following points 11a and 11b are inserted:
• ‘11a. Explicit costs include costs and charges incurred by the PRIIP, and paid out of retail investors’ financial investment in the PRIIP, in order to acquire or dispose of the underlying assets of the PRIIP, such as but not limited to commissions paid to brokers or other intermediaries, stamp duty or market taxes, contract fees and execution fees for OTC derivatives, where relevant.
• 11b. Aggregate explicit costs shall be calculated as the sum of such costs incurred from all transactions undertaken by the PRIIP over the previous three years. That sum shall be converted into a percentage by dividing by the average net assets of the PRIIP over the same period. The minimum explicit costs to be disclosed shall be calculated on an annualised basis based on an average of explicit costs incurred by the PRIIP over the previous three years, with the average calculated from all transactions.’;

• (9) points 14 and 15 are replaced by the following:
• ‘14. The arrival price shall be determined as the mid-market price of the investment at the time when the order to transact is transmitted to another person. For orders that are transacted on a day that is not the day that the order was originally transmitted to another person, the arrival price shall be determined as the opening price of the investment on the day of the transaction or, where the opening price is not available, the previous closing price. Where a price is not available at the time when the order to transact is transmitted to another person, the arrival price shall be determined as the most recently available price or, where a recent price is not available, a justifiable independent price or, where a justifiable independent price is not available, the opening price on the day of the transaction or, where the opening price is not available, the previous closing price. Where an order is executed without being transmitted to another person, the arrival price shall be determined as the mid-market price of the investment at the time when the transaction was executed.
• 1. Where information about the time when the order to transact is transmitted to another person is not available (or not available to a sufficient level of accuracy), or where information about the price at that time is not available, a justifiable independent price may be used as the arrival price or, where a justifiable independent price is not available, the opening price of the investment on the day of the transaction or, where the opening price is not available, the previous closing price.’;

• (10) point 18 is replaced by the following:
• ‘18. When calculating the costs associated with orders that are initially entered into an auction, the arrival price shall be calculated as the mid-price immediately prior to the auction. In calculating the costs associated with orders that are executed at a pre- determined time, the arrival price shall be calculated at that pre-determined time, even if the order has been transmitted for execution before that time.’;

• (11) after point 18, the following heading and point 18a are inserted: ‘ Transactions executed on an over-the-counter basis
• 18a. By way of derogation from points 12 to 16 of this Annex for transactions executed on an over-the-counter basis, the actual transaction costs shall be calculated in the following way:
• (a) where a transaction is executed after bid prices and offer prices have been obtained from more than one potential counterparty, the arrival price shall be determined as:
• (i) the mid-point between the best bid price and best offer price, where the best bid price is below the best offer price;
• (ii) the best bid price in the case of a sale or the best offer price in the case of a purchase, where the best bid price is higher than the best offer price;
• (b) where a transaction is executed without both bid prices and offer prices having been obtained, the transaction cost shall be calculated by multiplying the number of units transacted by half the value of the spread between the bid price and the offer price of the instrument, whereas the value of that spread shall be calculated on the following basis:
• (i) from a composite of live market bid/offer quotes, where available;
• (ii) where live market bid/offer quotes are not available they shall be obtained by reference to spreads from either:
• — previous transactions in assets bearing similar characteristics (duration, maturity, coupon, call-/put- ability) and liquidity, using transactions previously executed by the PRIIP manufacturer; or
• — data verified by an independent third-party or an asset valuation from an independent third party.’;

• (12) the following point 20a is inserted:
• ‘20a. When calculating the costs associated with non-financial assets, the transaction costs shall be calculated as the aggregate of the actual costs directly associated with that transaction including all charges, commissions, taxes and other payments (such as anti-dilution levies), where those assets are made from the assets of the PRIIP. In the case of cost depreciation over a period specified in the PRIIP’s accounting policies, actual costs shall be equal to the cost amounts depreciated over the last three years.’;

• (13) after point 23, the following heading and point 23a are inserted: ‘ 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.’;

• (14) after point 23a, the following heading and points 23b and 23c are inserted: ‘ 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.’;

• (15) heading I of Part 2 is replaced by the following: ‘I.AGGREGATED COST FIGURES TO BE INCLUDED IN TABLE 1 “COSTS OVER TIME”’;

• (16) points 61 and 62 are replaced by the following:
• ‘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.
• 1. 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.’;

• (17) heading after point 62 is deleted;

• (18) point 63 is replaced by the following:
• ‘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.’;

• (19) after point 63, the following heading II of Part 2 and subheading are inserted: ‘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 ’;

• (20) point 64 is replaced by the following:
• ‘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 %.’;

• (21) heading after point 64 and points 65, 66 and 67 are replaced by the following: ‘ Recurring costs indicators: Transaction costs and other recurring costs
• 1. 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 %.
• 1. 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.
• 1. 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.’;

• (22) heading after point 67 and points 68 and 69 are replaced by the following: ‘ Incidental costs and incidental costs indicators (performance fees and carried interests)
• 1. 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 %.
• 1. 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.’;

• (23) after point 69 the following heading is inserted: ‘III.CALCULATION OF THE COST FIGURES’;

• (24) points 70 and 71 are replaced by the following:
• ‘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.
• 1. 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.’;

• (25) after point 75, the following heading is inserted: ‘ Specific requirements for PRIIPs with a recommended holding period of less than one year ’;

• (26) after point 76, heading ‘Calculation of ratios’ is deleted;

• (27) the following point 76a is inserted:
• ‘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.’;

• (28) after point 76a, the following heading and point 76b are inserted: ‘ 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.’;

• (29) after point 76b, the following heading and point 76c are inserted: ‘ 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.’;

• (30) points 78, 79 and 80 are replaced by the following:
• ‘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.
• 1. The cost figures shall be calculated at least once a year.
• 1. 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.’;

• (31) point 82 is replaced by the following:
• ‘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.’;

• (32) point 84 is replaced by the following:
• ‘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.’;

• (33) heading II of Part 2 is deleted;

• (34) point 90 is replaced by the following:
• ‘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.’;

• (35) points 92, 93 and 94 are deleted.;

ANNEX VII

‘

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”

“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]”

“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.”

“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]””

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ANNEX VIII

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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 ([^E0006]); 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).

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[^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]: Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1).

[^E0006]: Commission Delegated Regulation (EU) No 694/2014 of 17 December 2013 supplementing Directive 2011/61/EU of the European Parliament and of the Council with regard to regulatory technical standards determining types of alternative investment fund managers (OJ L 183, 24.6.2014, p. 18).