A Key Information Document (KID) is a standardised three-page summary that every packaged retail investment product in the EEA must publish, covering risk, performance scenarios, costs and recommended holding period in a fixed format. Because the format is identical across products, the KID is the fastest honest way to compare two investments before reading any marketing material.
Every certificate, ETI, structured note and fund offered to retail investors in Europe comes with a KID, required by the PRIIPs Regulation (EU) No 1286/2014EUR-Lex. It is short by design: the regulator's bet is that three standardised pages read carefully beat three hundred pages skimmed. The bet only pays off if you know what each section means — and what it deliberately leaves out.
What a KID is, and why it exists
Before 2018, comparing a certificate from one issuer with a fund from another meant reconciling two marketing documents written to different rules. The PRIIPs Regulation replaced that with a single format: same sections, same order, same risk scale, same cost tables, for every packaged retail and insurance-based investment product sold in the European Economic Area. General rule The manufacturer writes the KID; whoever sells or advises on a PRIIP to a retail investor must provide it free of charge, in good time before the investor is bound by any contract or offerEUR-Lex. The obligation attaches to the retail sale, which is why an instrument reserved to professional investors can be distributed without one.
The seven sections, one by one
A KID always answers the same seven questions in the same order. The table below shows what each section contains and what a careful reader checks in it:
| KID section | What it tells you | What to check |
|---|---|---|
| What is this product? | Legal form, objectives, target market | Is it a fund or a debt security? Does the strategy match your goal? |
| What are the risks? | SRI scale 1–7 plus narrative warnings | The narrative next to the number — issuer risk, currency risk, liquidity |
| What could I get back? | Stress, unfavourable, moderate, favourable scenarios | The stress line: what a severe market does to your holding |
| What if the issuer cannot pay? | Treatment on manufacturer default | Collateralisation, trustee arrangements, absence of guarantee schemes |
| What are the costs? | One-off, ongoing and incidental costs over time | Annual cost impact at the recommended holding period |
| How long should I hold it? | Recommended holding period, exit terms | Early-exit costs and how you actually sell |
| How can I complain? | Contacts and procedure | Keep it — it names the entity responsible |
Source Section order and content follow the mandatory template in Commission Delegated Regulation (EU) 2017/653, Annex IEUR-Lex, as amended by Commission Delegated Regulation (EU) 2021/2268EUR-Lex, applicable since 1 January 2023. The “what to check” column is editorial guidance, not a regulatory requirement.
Reading the risk indicator properly
The summary risk indicator (SRI) is the number everyone looks at and most people misread. It aggregates two prescribed components: a market risk measure and a credit risk measure, combined into a single 1–7 figure by a methodology set out in the delegated regulation rather than chosen by the manufacturerEUR-Lex. A 3 is not "safe" and a 6 is not "reckless" — the number describes the dispersion of outcomes, not their quality.
Three things the SRI does not capture are printed in the narrative beside it, which is why that paragraph matters more than the number. Liquidity risk: a product can be low-volatility and still hard to sell. Currency risk: the scale is computed in the product's currency, not yours. And materiality thresholds: strategies with short histories borrow proxy data, which can understate tail risk. Read the number, then read the words.
Performance scenarios are not forecasts
The "What could I get back?" table shows four scenarios — stress, unfavourable, moderate, favourable — at one or more holding periods. These are standardised calculations prescribed by regulation; since the 2021 amendment the methodology has been revised specifically to reduce the risk that favourable scenarios read as forecastsEUR-Lex. They exist so that two products can be compared on the same maths, not to predict what will happen. Treat the moderate scenario as an illustration, not an expectation, and give the stress scenario the attention it rarely gets: it approximates what a severe market would do to your position, and it is the only line in the KID that talks about bad outcomes in euros rather than adjectives.
The costs table: where returns quietly leak
The costs section is the most valuable page in the document, because it forces every product to express its charges the same way. The cost categories and the “reduction in yield” presentation are themselves prescribed, which is what makes two KIDs comparableEUR-Lex. Costs are split into three families:
- One-off costs — entry and exit charges, including any difference between the issue price and the net asset value at launch.
- Ongoing costs — management fees, administration, and transaction costs inside the product, charged every year regardless of performance.
- Incidental costs — performance fees. Check the mechanics: a fee with a high-water mark only pays on new highs; one without can charge twice for the same gain.
The single most useful figure is the annual cost impact: how much yearly return the total costs subtract if you hold for the recommended period. Comparing that one number across two candidate products tells you more than any brochure. Framont example For an example of these figures in a live document, the HERAKLIT Strategy ETI product page publishes its KID alongside the prospectus; the instrument is issued by iMaps ETI AG under ISIN DE000AMC0D44, with Framont & Partners Management Ltd as portfolio manager of the reference portfolioiMaps.
KID vs prospectus vs final terms
The KID summarises; it never governs. The base prospectus is the legal foundation of the instrument, approved by the competent authority, and the final terms fix the parameters of the specific issue — ISIN, dates, fees, minimumsEUR-Lex. The relationship between the two documents is more precise than “the prospectus wins”, and the distinction matters if you ever need to rely on it. The prospectus and final terms are the contractual documents that define what the issuer owes you; the KID is a summary disclosure and does not alter those terms. But the PRIIPs Regulation separately requires the KID to be accurate, fair, clear and not misleading and to be consistent with the binding contractual documents, and it provides that a retail investor who relies on a KID that fails that standard may claim damages from the manufacturerEUR-Lex. In other words: the prospectus governs the instrument, while an inaccurate KID is the manufacturer's problem, not something you simply have to absorb. A sensible reading order for any listed product: A sensible reading order for any listed product: KID first for the shape, final terms for the numbers, prospectus for anything you intend to rely on.
Where to find KIDs for products on Framont Access
Listed products distributed through Framont Access publish their KID and prospectus on their product page: HERAKLIT Strategy ETI and Tech Megatrend Tactical ETI. For Snow White — Value Edge ETI the Key Information Document and the prospectus are available from Framont & Partners Management Ltd on request. Instruments reserved to professional investors — clients meeting the MiFID II Annex II criteria, either by category or by opting up after an assessment of their expertise, experience and knowledgeEUR-Lex — such as the Noctiluca Capital AMC, publish term sheets instead: the retail KID obligation does not reach them. Your bank or broker must in any case make the KID available before accepting a retail order.
- It is a reading guide to a document format, not legal, tax or investment advice, and not an assessment of any product's suitability for you.
- It does not replace the KID itself, the prospectus, the final terms or the term sheet of any instrument. Where this guide and a governing document disagree, the governing document controls.
- It describes the EEA retail regime. Treatment differs for professional clients, and outside the EEA the document may not exist at all.
- Cost, risk and scenario methodologies are amended periodically. Check the date below against the version of the delegated regulation in force when you read the KID.