Under the upcoming UCITS IV regulations, the investment manager of a UCITS will be obliged to provide potential investors with a Key Investor Information document (KII document) before they invest. The KII document is a 2-page document covering the main features of the UCITS in a standard format that allows easy comparison of products from different providers.

The KII document must be written in simple language, yet must be consistent with the prospectus – the investment manager may be held liable for inaccuracies or iconsistencies with the prospectus.

As if to make this harder, there is a long list of mandatory information that must be included, yet the whole document must fit within 2 sides of A4 (3 for structured funds). Many difficult decisions will need to be made about which features of the fund are material and which can be omitted.

Simply drafting the content for a single KII document will be a significant challenge, and will likely require input from the marketing, product development, compliance and legal teams. When the sheer number of KII documents is factored in, the scale of the problem is much larger still.

A KII document is required for every share class. (The regulations allow managers to provide a single document covering several share classes, but the practical difficulties with this approach make it unappealing). The KII document must also be made available in the official language of every EU state in which the fund is sold.

Thus, the total number of KII documents required can be roughly calculated as:

    number of funds
 x number of share classes per fund
 x number of countries (languages)

Many investment managers will have to produce hundreds, thousands or even tens of thousands of KII documents by July 2012 at the latest, and keep those documents up-to-date thereafter (with at least one update per year).

The KiiDocs system is designed specifically to address these challenges.