A survey of the European asset management industry has found that the majority of managers remain supportive of the new Key Investor Information Document (KIID), but believe it would add costs and complexity.
The survey was conducted in September by fund services group Kneip. It showed 70% of respondents believe that producing the KIID will cost more than the simplified prospectus.
Costs could be increased by timing differences in implementation between countries, as fund managers are forced to produce both KIID and simplified prospectus documents in the short-term. Also, the survey found that only a small minority of fund managers (13%) plan to use the representative share class directive to group share classes where possible. (article continues below)
Almost 90% of respondents said that they would consider outsourcing KIID documentation, particularly to ensure continuity across borders.
35% are worried that their existing distribution network will be inadequate
Distribution of the new documentation is also likely to pose problems. 75% of fund managers are concerned about ensuring proper distribution, while 35% are worried that their existing distribution network will be inadequate.
That said, the industry remains broadly supportive of the KIID initiative. Around two-thirds of fund managers said that it would bring increased comparability of products and greater ease of understanding. It would also bring about better disclosure.
Ucits IV, of which the new KIID rules are part, is due to be introduced on July 1 next year. 60% of respondents do not expect the implementation of the new directive to affect their distribution strategy and will continue to issue new funds in all jurisdictions irrespective of whether Ucits IV has been adopted.