Translation of KIDs for PRIIPs: A Perspective from China

Why Financial Industry Expertise Matters

The financial services industry is highly specialized, with its own complex language. As China’s financial markets continue to develop, regulatory environments are becoming more stringent, especially in areas like investor protection and financial product transparency. Even a simple translation error can lead to significant legal and compliance risks for financial institutions.

When it comes to the translation and compliance of financial product disclosure documents, especially Key Information Documents (KIDs), it is crucial to ensure they meet the specific legal and regulatory requirements of the Chinese market to avoid any legal consequences.

What are KIDs for PRIIPs?

In Europe, the PRIIPs regulation requires product issuers or distributors to provide investors with a "Key Information Document" (KID), which details essential information about the product, including investment risks, costs, and potential returns or losses.

While China does not have a law exactly equivalent to PRIIPs, the Measures for the Administration of Financial Product Sales and the Securities Investment Fund Law contain similar requirements for disclosure of financial products. According to Chinese regulatory agencies, financial product sellers are required to provide comprehensive and clear product information to help investors make informed decisions.

Chinese investor protection laws also emphasize principles like "suitability management" and "transparency," meaning that during the sales process, financial institutions must disclose the risks and returns of products fully and ensure that investors understand this information.

How KIDs and KIIDs Apply in China

In China, while there is no specific PRIIPs regulation, there are detailed disclosure requirements for similar investment products, such as funds and insurance-based investment products. The China Securities Regulatory Commission (CSRC) and other regulatory agencies mandate that companies offering financial products, including funds, must produce and publish detailed product disclosure documents. These documents must be concise and clear to help investors understand the nature, risks, and returns of the products.

In China, documents similar to KIDs must comply with information disclosure requirements, ensuring that all product information is clear and transparent. These disclosure documents include not only risk disclosures but also details on the product’s cost structure, investment objectives, and investment strategies, so that investors are fully informed before purchasing the product.

The Challenges of Writing KIDs and KIIDs

Although China does not have a specific PRIIPs regulation, financial institutions still face challenges when it comes to writing and translating product disclosure documents. Especially in cross-language and cross-cultural contexts, translation needs to ensure precise conveyance of financial terminology. Financial products' regulations, terminology, and market environments can vary significantly between countries, so for the Chinese market, translation and localization require more than just language conversion—it also demands a thorough understanding of China’s regulatory requirements and market demands.

For international financial institutions operating in China, understanding the Chinese financial regulations, particularly in areas such as investor protection and information disclosure, is critical. Translation and localization service providers need to ensure the accuracy and compliance of product information, mitigating legal risks due to translation errors.

How Can Arrow Translation Help in the Chinese Market?

Arrow Translation has over 20 years of experience in financial translation, particularly in the creation, revision, and translation of KIDs and KIIDs. We have a deep understanding of Chinese financial market regulations and investor protection requirements, and we can provide translation and localization services that meet China’s regulatory standards.

We can support you in the following areas:

• Linguistic Services: Writing, translating, and editing KIDs and KIIDs in plain language
• Compliance Check: Ensuring all translations meet Chinese financial regulations and disclosure requirements
• Process Management: Providing customized translation workflows, supporting content management systems or dedicated production software
• Team Integration: Offering professional project management, product management, and compliance services
• Other Services: Desktop publishing and localization design for your KIDs/KIIDs

Whether you want to outsource the entire content creation process or just certain parts of it, we can provide accurate translation and localization services based on your existing product documentation and the legal requirements of the Chinese market.

Get in Touch

Arrow Translation also offers financial translation services for Basel III, IFRS, and other regulations. We ensure that your product documentation complies with Chinese legal requirements while maintaining consistency across multiple languages.

Contact us for more information.

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