The European Parliament has backed proposals for a key information document to be adopted across all financial products.
The document is based on the key investor information document which was introduced to regulated investment funds under Ucits IV rules in 2011.
The new document will apply to structured products and other products aimed at retail investors.
French MEP Pervenche Berès said the documents would help investors “take informed financial decisions”.
“Many small investors also want to know how investing in a given product could affect the environment, society or governance before committing their money, and [the documents] can help here, too,” she added.
The documents, dubbed ‘Kids’, will make clear the risks associated with the products as well as allow investors to compare costs.
As part of the plans the EU’s economic and monetary affairs committee has also proposed a ‘cost calculator’ to be made available to investors to give an estimate for how much of an effect product charges have on performance.
Following the European Parliament’s move, the proposals are now to be approved by EU member states.
