MAKING THE MOST OF UCITS IV

UCITS IV Key Investor Information Document

LEGAL TEXTS: DIRECTIVE 2009/65/EC (UCITS IV), CHAPTER VIII, ARTICLES 78 TO 82 - COMMISSION REGULATION (EU) NO. 583/2010

The goal of the Key Investor Information Document (KIID) introduced by UCITS IV Directive 2009/65/EC is to replace the simplified prospectus by offering stan- dardised, key information content for investors. The change has less to do with the items covered than with the simplification of each of them, so as to provide clear and concise information that is comprehensible to all share/unit-holders. It will be mandatory for Management Companies to draw up a KIID. Objective of the measure and benefits

formance and risks. Furthermore, the common format of this pre-contractual legal document will facilitate comparison between UCITS irrespective of their home Member State. The UCITS IV Directive comes into effect on 1 July 2011. All new UCITS will be required to produce a KIID from that date onwards. For existing UCITS, the Direc- tive provides for a transitional period extending to 1 July 2012; However, not all Member States will necessarily apply this.

The KIID also enables an improvement in transparency in terms of charges, per-

Key features

Principle: A KIID for each UCITS share/unit class. Format

4 - Risk and reward profile. The Synthetic Risk and Reward Indicator (“SRRI”) represents the degree of risk to which the UCITS is exposed. The calculation method is based on the histo- ric volatility of the UCITS and, where this is not relevant (structured funds, for example), on the volatility stemming fromVaR risk levels. The SRRI classifies the UCITS in ascending order on a scale of 1 to 7, as shown in the model below.This is supplemented by a narrative explanation of the indicator and its key limits, to- gether with an explanation of the significant risks to which the UCITS is exposed. The indicator will be reviewed as and when the Management Company believes this to be necessary and if, over a comparative period of four months, the result of the SRRI is set to be different to that for the preceding period.

• Two-page double-sidedA4 format (three pages in the case of structured UCITS); • Font must be easy to read; • Clear, concise and comprehensible wording in the language of investors; • The necessary information only; • Durable medium such as paper or via a website.

Structure: Seven mandatory headings

1 - Title of the document and disclaimer regarding its purpose.

Example

2 - Identification of the UCITS: Name of the UCITS, ISIN code, name of the Management Company (…).

Low risk

High risk

Typically lower performance

Typically higher performance

3 - Investment objective and policy. This section of the KIID, which must be written avoiding any jargon, explains how the UCITS aims to achieve its management objective based on the invest- ment policy.

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CACEIS cannot be held responsible for any inaccuracy or interpretation error this document may contain