Earlier Marnix Arickx and Allan Pelvang spoke about the challenge mutual fund companies have been facing in introducing the EU-mandated key investor information document (KIID). Today we ask Mario Mantrisi, senior vice president at Kneip Communication, why so many firms are taking advantage of the year’s transition time before they start to use the KIID.

AG: Why don’t firms want to claim ‘first mover’ advantage?

MM: There are certain elements which have to be disclosed which could have an impact in terms of competition. For example, TER or total expense ratio. In the KIID the TER is very clearly defined: what is ‘in’ and what is ‘out.’ For a KIDD, more things are used for the TER than used to be used in annual reports or other marketing materials. Now everyone will have a higher TER than what they had before. That’s why they don’t want to be the first one, because it will look like they have a higher TER compared to peers.

AG: Are cost considerations at play?

MM: If you issue a KIID [before the end of the year], you will have issue it again in January. Some are waiting so they don’t have to produce two in six months.

AG: Any other reasons?

MM: Very honestly, a lot of people are not ready. Even if they would like to take the risk to be the first one, they’re just not ready.

More on UCITS IV can be found in the June print edition of Delano.