What are PRIIPs?
Packaged retail investment and insurance-based products (PRIIPs) is a broad category of financial assets that are regularly provided to consumers in the European Union (EU) through banks or other financial institutions. For these assets regulators require the financial institutions to provide unified key information documents (KIDs). KIDs shall provide information about risk, costs and possible future scenarios of the instrument and its value to make these quantities comparable between different assets, also across different asset classes.
What information is in a PRIIPs-KID?
To make PRIIPs-KIDs readable and comparable there are strict guidelines for form and content of the document. Information that needs to be incluced contains:
- Type and properties of the product
- Possibilities of the loss of capital
- The cost structure of the product
- The risk profile of the product
- Performance of the product based on given scenarios
What does the UnRisk PRIIP solution provide?
The UnRisk PRIIP solution offers a modular system for the automated calculation of all relevant key risk ratios as well as for the production and the management of PRIIPs-KIDs. The system is based on the bank proven UnRisk Engines. It is installed on-premise and uses market and instrument data provided by the financial institutions. The calculation of the key ratios follows the regulatory requirements and performs the following steps:
- Building up market data scenarios
- Calculation of all relevant cash flows
- Valuation of instruments at the required time points
- Calculation of the required key ratios (risk, costs)
The covered product universe includes interest rate caps and floors, FX forwards, FX and equity options, all sorts of bonds, swaps, inflation linked products, cross currency swaps and structured equity linked products.
The KIDs tool provides functionality for the production and the management of PRIIPs-KIDs. Features include:
- Versioning of the PRIIPs-KIDs
- Extensive search capabilities (full-text search, key ratios, instrument properties,... )
- Editor to create the text blocks with internationalization
- Monitoring system with alerts