The Swiss Funds Association (SFA) has welcomed the introduction of the Key Investor Information Document (KID), which will replace the simplified prospectuses supplied for UCITS publicly marketed in the EU from 1 July.

In a statement, the SFA said the KID is to be written in readily understandable form and is to comprise no more than two A-4 pages, or three A-4 pages in the case of structured funds.

Improvements over the simplified prospectus included that the new synthetic risk and reward indicator will be mandatory, and will express the risk/return profile of a fund as a number between 1 (lower risk/typically lower rewards) and 7 (higher risk/typically higher rewards).

The introduction of the KID, required under the EU’s UCITS IV Directive, is subject to a one year transition period.

Minor amendments are required to the Swiss collective investment schemes legislation (CISO), which could be implemented in the Federal Council’s Ordinance. Corresponding amendments to the CISO will enter into force on 15 July 2011.

SFA president Martin Thommen thanked the authorities involved for dealing with the matter quickly, and reaching a prompt decision.

Thommen said that introducing the KID in Switzerland at the same time as in the EU is in the interests of all Swiss and foreign fund promoters who market their UCITS in the country.

“This means that they now need only produce a concise information document, which also increases transparency for investors. The SFA will clarify the further questions relating to technical implementation with FINMA [Swiss Financial Markets Authority] as quickly as possible. We will incorporate the detailed regulations of the EU supervisory authorities on the KID (CESR Guidelines) in the form of SFA self-regulation material, and submit this to FINMA for approval.”

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