EUROPE - Almost three quarters of European fund managers fear the new Key Investor Information Document (KIID) will increase costs, research by KNEIP has found.
Some 70% of asset managers believe producing the document, which comes into effect under Ucits IV regulation next year, will cost more than the current simplified prospectus it is set to replace.
KNEIP said this increase in costs could come from areas such as timing, volume, operations and delivery. Not all countries will implement Ucits IV at the same time, which gives rise to the possibility that until they do, fund managers would need to produce both the simplified prospectus and the KIID simultaneously, essentially duplicating costs the firm added.
The survey also found 75% of respondents are also concerned about adequate distribution. More than a third (35%) have concerns about getting the KIID to the end investor through the distribution network and 60% are worried about producing the KIIDs within the allotted time-frame.
However, nearly 70% respondents think the KIID will bring increased comparability of products and ease of understanding for investors.
KNEIP chief executive officer Bob Kneip said: "As we head towards Ucits IV, the asset management industry finds itself caught up in preparation for the changes that will be a part of the new regime. Coming out of the recession has been a challenge for the industry, and fund managers need to act now if they are to meet the changes head-on and in time for the July 1 deadline next year.
"The introduction of the KIID is a major issue. There are questions around increased costs and concerns around implementation. However, the KIID is driven by market need as it offers standardisation, uniformity and transparency through common processes, materials, and presentation. Ultimately we think that adopting the KIID will in fact end up to be more efficient - both from an operations and cost perspective."
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