US manufactured products that are subsequently resold in
Europe retail investors can create a liability headache for the
original issuer in the event the product has been labelled as
There is currently no obligation for a US issuer to produce
a three-page key information document (KID) outlining the
product’s risks and payout terms if they sell
outside if the European Union. But under the European Packaged
Retail Investment and Insurance Products (Priips) regulation,
which is due to come into force on January 3 2018, any issuer
that finds itself selling to EU retail investors at any point
has to provide a KID.
Priips lists financial products that may be sold to
non-professional investors including insurance-based investment
products, derivatives, retail structured securities as well as
most investment funds.
This poses a risk for US issuers which may not necessarily
be in control of primary or secondary sales, regardless...