Key information document
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A key investor information document, or “KIID” (or even, for the less finnicky, a “KID”) is a document intended to help an investor to understand the basic risks of the financial product she may be considering and make an informed investment decision.
This is radical and, for an attorney, rather intimidating for, in the sainted history of financial law, neither of these things has ever been part of the enterprise of anyone drawing up offering materials. The basic purpose of offering documents has always been threefold:
- To bury the intellectual technology — for which read, conceal the abject lack of it — underpinning any financial product so that no two bit attorney can therefore milk the overflowing trough;
- To cover the issuer’s, arranger’s and, more importantly, their counsel’s posteriors against the risk of having neglected to advise of the inherent flaws, inefficiencies and perfidies of said financial product; and
- generally to baffle and/or bore any investor and/or regulator sufficiently close to exasperation to stop it asking questions.
The KIID is a standardised two-page document prescribed by European regulation with a format so investors can compare products easily. As such it is a kind of kryptonite to a securities lawyer, who will quail before one, and may crumble into desiccated powder, wailing “IT CANNOT BE DONE I TELL YOU IT IS AN ABOMINATION”.
Also, a form of Heat Ray in the underappreciated 1950s sci fi shocker The Day of the MiFID.