Presentation of charges
1. The ‘Charges’ section of the key investor information document shall contain a presentation of charges in the form of a table as laid down in Annex II.
2. The table referred to in paragraph 1 shall be completed in accordance with the following requirements:
(a)
entry and exit charges shall each be the maximum percentage which might be deducted from the investor’s capital commitment to the UCITS;
(b)
a single figure shall be shown for charges taken from the UCITS over a year, to be known as the ‘ongoing charges,’ representing all annual charges and other payments taken from the assets of the UCITS over the defined period, and based on the figures for the preceding year;
(c)
the table shall list and explain any charges taken from the UCITS under certain specific conditions, the basis on which the charge is calculated, and when the charge applies.
Explanation of charges and a statement about the importance of charges
1. The ‘Charges’ section shall contain a narrative explanation of each of the charges specified in the table including the following information:
(a)
with regard to entry and exit charges:
(i)
it shall be made clear that the charges are always maximum figures, as in some cases the investor might pay less;
(ii)
a statement shall be included stating that the investor can find out the actual entry and exit charges from their financial adviser or distributor;
(b)
with regard to ‘ongoing charges’, there shall be a statement that the ongoing charges figure is based on the last year’s expenses, for the year ending [month/year], and that this figure may vary from year to year where this is the case.
2. The ‘Charges’ section shall contain a statement about the importance of charges which shall make clear that the charges an investor pays are used to pay the costs of running the UCITS, including the costs of marketing and distributing the UCITS, and that these charges reduce the potential growth of the investment.
Additional requirements
1. All of the elements of the charging structure shall be presented as clearly as possible to allow investors to consider the combined impact of the charges.
2. Where the impact of portfolio transaction costs on returns is likely to be material due to the strategy adopted by the UCITS, this shall be stated within the ‘Objectives and investment policy’ section, as indicated in Article 7(2)(e).
3. Performance fees shall be disclosed in accordance with Article 10(2)(c). The amount of the performance fee charged during the UCITS’ last financial year shall be included as a percentage figure.
Specific cases
1. Where a new UCITS cannot comply with the requirements contained in Article 10(2)(b) and Article 11(1)(b), the ongoing charges shall be estimated, based on the expected total of charges.
2. Paragraph 1 shall not apply in the following cases:
(a)
for funds which charge a fixed all-inclusive fee, where instead that figure shall be displayed;
(b)
for funds which set a cap or maximum on the amount that can be charged, where instead that figure shall be disclosed so long as the management company gives a commitment to respect the published figure and to absorb any costs that would otherwise cause it to be exceeded.
Cross-referencing
The ‘Charges’ section shall include, where relevant, a cross-reference to those parts of the UCITS prospectus where more detailed information on charges can be found, including information on performance fees and how they are calculated.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
