PRIIP KIDS: Increased Focus on Procedures and Controls

In August 2026, the Danish Financial Supervisory Authority (the FSA) published four inspection reports on fund managers’ procedures for preparing and reviewing PRIIP KIDs, together with an updated set of Q&As. The inspections show that managers do not always have adequate procedures to ensure that PRIIP KIDs are accurate, fair, clear and not misleading. They also underline the FSA’s focus on the governance and controls supporting the information provided to investors.

A PRIIP KID is a standardised document. It provides retail and semi-professional investors with key information about a specific investment product, including its strategy, risks, expected returns and costs, enabling investors to make an informed investment decision.

Four inspection reports: different findings and supervisory reactions
The thematic inspection covered two investment management companies and two alternative investment fund managers. One of the inspections did not result in any supervisory reactions. The three other managers received orders addressing deficiencies in their procedures, controls or the content of their PRIIP KIDs.

Key findings from the inspections
The inspection reports identify several areas that managers should pay particular attention to:

• Fund-specific methodologies. Performance scenarios and risks should be calculated using methods and assumptions that reflect the investment strategy and risk profile of each individual fund. Managers should not rely on averages across funds with materially different characteristics;
• Accurate performance and cost information. Performance targets stated in a PRIIP KID should be consistent with the performance scenarios calculated under the PRIIP rules. The impact of costs on returns must also be calculated in accordance with the prescribed internal rate of return (IRR) method; and
• Documented governance and controls. Managers should clearly document the allocation of responsibilities and the key processes and controls governing the preparation, approval, ongoing review and publication of PRIIP KIDs. The procedures should be designed to prevent incorrect or outdated PRIIP KIDs from being published.

Review and update requirements
The updated Q&A confirms that a PRIIP KID must be reviewed at least annually and whenever a change materially affects, or is likely to affect, the information it contains. The FSA states that a change of more than five percentage points in a performance scenario must, at a minimum, be treated as an indication that an update is required, and that smaller changes may also trigger an update where they are material to investors. The same update obligation applies to a closed-ended fund where interests are traded between existing investors. PRIIP KIDs must also be publicly accessible on the manager’s website and cannot be placed solely behind an investor portal or other access barrier.

Consistency between the PRIIP KID and marketing material
The FSA states that marketing material must always be consistent with the PRIIP KID. Any information on expected returns must either reflect the moderate performance scenario for the recommended holding period or reproduce all performance scenarios for that period. Where a manager considers that the standardised scenarios do not adequately reflect its expectations, it may provide explanations, provided these are not misleading and do not undermine or replace the official scenarios. This is particularly relevant for VC and PE managers whose pitch decks or investor presentations refer to target or gross IRR figures, which must not contradict or diminish the information in the PRIIP KID. This follows the position previously described in our earlier Pulse update here.

Looking ahead: what fund managers should do
The inspection reports and updated Q&A demonstrate that PRIIP compliance extends beyond the final document. Managers of products made available to retail or semi-professional investors, including relevant VC and PE AIFMs, should therefore:

• review and document the allocation of responsibilities, data inputs, methodologies, approval processes, ongoing controls and publication procedures for PRIIP KIDs;
• ensure that calculations and performance scenarios are fund-specific and establish a documented process for annual and event-driven reviews, including clear escalation and update criteria; and
• review marketing and investor communications against the PRIIP KID, paying particular attention to target or gross IRR figures used in pitch decks and other fundraising materials.

The FSA’s press release is available here
The updated Q&A on PRIIP KIDs is available here.

Tags:  KID / PRIIPSThe Danish FSA