Unwinding of COVID Chaos: Anticipated Mass KIID/KID Re-Generation in Mid-2025

The COVID-19 pandemic brought unprecedented volatility to global financial markets, leading to significant fluctuations in UCITS and PRIIPs risk indicators. As we approach 2025, the industry must prepare for a major shift in these metrics, triggering the need for widespread KIID and KID document updates.

The onset of the global pandemic in early 2020 created unparalleled volatility in financial markets. From mid-February to early April of that year, markets experienced extreme fluctuations, leaving a lasting impact on financial products and their risk profiles. The UCITS Key Investor Information Document (KIID) Summary Risk and Reward Indicator (SRRI) calculation, which relies on a five-year data period, was notably affected by this volatility.

Similarly, funds governed by the PRIIPs Key Information Document (KID) regulation, especially those with a five-year recommended holding period, saw this heightened volatility reflected in their Summary Risk Indicator (SRI) calculations.

By mid-April 2025, the peak volatility period from early 2020 will no longer be part of the SRRI and SRI calculation periods. This change is expected to bring a significant decrease in these risk indicators across a wide range of funds.

In a recent case study conducted by Funds-Axis, we analyzed a diverse sample of funds and observed an average reduction of approximately 28% in the SRRI when the 7-week period from mid-February 2020 was excluded from the calculation. The variation in reduction spanned from minimal changes to as much as 70%, depending on the fund’s risk profile and market exposure.

The upcoming changes in SRRI and SRI calculations are likely to result in a widespread re-evaluation of the figures displayed in UCITS KIIDs and PRIIPs KIDs. This re-evaluation will necessitate the re-generation of a vast number of these documents, with the process beginning as early as April 2025 and extending into the summer months.

Product manufacturers must start planning now to manage this impending workload efficiently. The timing is particularly crucial for those producing PRIIPs KIDs, as they may need to align their annual updates with the expected changes in SRI figures to maintain compliance.

Seamus O’Cuill, Head of Investor & Digital Solutions at Funds-Axis, emphasises the importance of early preparation:

“In the absence of any severe market shocks between now and April 2025, the unwinding of the peak volatility periods from the SRRI and SRI calculations will undoubtedly lead to product manufacturers needing to re-produce a large percentage of their UCITS KIIDs and PRIIPs KIDs in mid-2025. Product manufacturers need to start planning for this now to ensure that they have the necessary resources and support in place for this regeneration.”

He continues:

“At Funds-Axis, we are committed to recognising potential upcoming market events and supporting our clients through unexpected additional workloads. We remain ready and vigilant to help our clients and the industry at large manage this increased workload.”

The anticipated shifts in SRRI and SRI figures represent a significant challenge for product manufacturers in 2025. By planning ahead, firms can mitigate disruptions and ensure that they continue to meet their regulatory obligations efficiently.

At Funds-Axis, we understand the complexities of UCITS KIID and PRIIPs KID production and the critical importance of accurate risk indicator calculations. Our team is equipped with the expertise and resources to support you through this transition, ensuring that your documentation remains compliant and up-to-date.