The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Translation Fears Mount Over KIID Documents

Subscribe to our newsletter

Legal, translation and reporting specialists have voiced fears over the burden for fund promoters under UCITS IV.

Among the important legal, workflow and production challenges in meeting the KIID (Key Investor Information Documents) requirements to be implemented in July, fund managers that wish to ‘passport’ UCITS funds into other EU states will have to translate KIIDs into the local language of each country where the fund is sold.

Brooke Christian of leading translation provider TransPerfect said: “The translation service will be under enormous pressure so efficiency and convenience in this area will be critical. Currently, the original text has to be sent to translators and on return the results delivered to the end document. Any changes to the original text then has to be resent, re-returned, re-delivered to the end document and so on. This is necessarily slow and with so many moving parts, it will inevitably be error-prone and therefore risky.”

Estimating and planning for document volumes will therefore be crucial to product promoters. For example, a promoter or distributor wanting to market a UCITS in its domestic market and five other EU markets with different local languages must plan for up to 6 languages x potentially 4 updates per year x the number of share classes of the fund – just to present one fund in all the EU countries for which it has a ‘passport’. If the funds each had three share classes, a promoter distributing 20 funds could be looking at 1440 KIIDs per year (6 x 4 x 3 x 20).

The issue is more than just one of volumes. Overlooking the translation of other marketing documents will also carry liability risks.

“It is all too easy for firms to focus only on the translation requirements of the KIID whilst neglecting to make an informed decision about whether it might be preferable to translate the prospectus and other documents into the investor’s language. There is a clear opportunity here for distributors and promoters to avoid any possible pitfalls by taking a more pragmatic perspective,” said Harald Glander, partner at UK law firm Simmons & Simmons.

Aside from the translation issues, from July the Synthetic Risk Reward Indicator (SRRI) will be the sole indicator of investment risk to the investor. It is based on volatility that in turn is based on historical data. “Bearing in mind the words of the wealth warning that ‘past performance is no guarantee of future results’, the regulators and industry generally should be calling for indicators of current and likely future conditions of the UCITS. The investor would surely be far better served by this approach,” said Abbey Shasore, CEO of reporting specialist Factbook.

Subscribe to our newsletter

Related content

WEBINAR

Upcoming Webinar: Sourcing and managing ESG disclosure data to ensure compliance

Date: 8 February 2022 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes As interest in ESG investing continues to accelerate, asset managers must source and manage increasing volumes of ESG disclosure data. Data volumes are not the only problem, with different types of ESG disclosure data, the need to master the...

BLOG

ANNA Service Bureau Migrates to Cloud as Part of Enhancement and Modernisation Programme

The Association of National Numbering Agencies (ANNA) has improved and modernised the ANNA Service Bureau (ASB). Key changes include the migration of the platform to a cloud-based infrastructure, a new user interface with an integrated data quality dashboard, a data challenge ticketing system, and enhanced search and download capabilities. Additional data elements related to the...

EVENT

TradingTech Summit Virtual (Redirected)

TradingTech Summit (TTS) Virtual will look at how trading technology operations can capitalise on recent disruption and leverage technology to find efficiencies in the new normal environment. The crisis has highlighted that the future is digital and cloud based, and the ability to innovate faster and at scale has become critical. As we move into recovery and ‘business as usual’, what changes and technology innovations should the industry adopt to simplify operations and to support speed, agility and flexibility in trading operations.

GUIDE

Trading Regulations Handbook 2021

In these unprecedented times, a carefully crafted trading infrastructure is crucial for capital markets participants. Yet, the impact of trading regulations on infrastructure can be difficult to manage. The Trading Regulations Handbook 2021 can help. It provides all the essentials you need to know about regulations impacting trading operations, data and technology. A-Team Group’s Trading...