The Act on Packaged Retail Investments and Insurance Products (The PRIIPS Act) came into force on 1 October 2024. Under the PRIIPS Act distributors and producers of certain insurance and investment products must produce a key information document to non-professional investors.
The PRIIPs Act implements the PRIIPs Regulation (Regulation (EU) 1286/2014) into Norwegian law. The scope of the PRIIPS Act includes undertakings marketing PRIIPS to retail investors in Norway as well as Norwegian undertakings offering PRIIPs abroad. Hence, the PRIIPS Act will have effect for EEA as well as non-EEA fund managers and insurance companies.
The key information document must be presented to non-professional investors prior to entering into an agreement to purchase packaged or insurance-based investment products, e.g. interest in alternative investment funds. In respect of the information requirements, the key information document must include detailed information on the product, the risk profile and cost structure of the product and potential returns. This aim is to enable consumers (non-professional investors) to make well-informed investment decisions.
The PRIIPS Act is supervised by the Norwegian Financial Supervisory Authority (NFSA. In the event of breach of the PRIIPS Act, the NFSA may sanction the breach by prohibiting the distribution of the key information document, requiring sellers or advisors of a PRIIP to inform investors of the non-compliance or imposing fines on the marketing undertaking and individuals acting on its behalf.
