Minimalist design principles for prospectus, key information document and priips' regulation

This article explores the main issues concerning informational mechanism for investors in Europe, regarding in particular capital markets and financial regulation. The analysis first highlights certain criticalities connected to the prospectus regulation and the relevant consequences. This paper then analyses how KIDs (key information document) regulation seeks to find a balance between «the need for information and information over production», by examining the characteristics of such documents (short and standardized format, length cap, etc.), with specific regard to the description of risk return and costs. Finally, the deficiencies of such regulation lead to advocate the adoption of a neutral risk-based approach (the «probability scenarios of performance») that would make possible to provide investors with a set of information describing performances’ probability net of costs.