08.07.2024

Arrival-price-method from January 2025

Start preparing now!

As of 1 January 2025, all PRIIP KIDs will face a change in the calculation of transaction costs:
While it was previously possible to calculate transaction costs using either the MiFID or estimated method, from January 2025 the Arrival-price-method for calculating transaction costs will be mandatory for all PRIIP KIDs in order to ensure cross-product comparability.

What does the Arrival-price-method mean?

The Arrival-price-method requires that in future the difference between the market price (arrival price) when the order is placed and the actual trading price must be calculated and recognised as transaction costs in the PRIIP KID instead of an estimated value for the transaction costs. If there are no market prices, RTS Directive-compliant estimates must be used.

What impact does the arrival price method have on financial market participants?

In order to be able to apply the Arrival-price-method, financial market participants must have historical market data available. However, historical market prices (arrival prices) are not always available or are difficult to determine, meaning that it is sometimes necessary to work with estimated values. New, rule-compliant processes and standards must be implemented by PRIIP KID providers for the various asset classes in order to determine estimated values in compliance with the RTS.

The switch to the arrival price method therefore requires the necessary processes, database and software to be prepared accordingly in order to be able to offer compliant mandatory documents from January 2025 at the latest.

Start in good time

It is advisable to prepare the complex process adjustments and technical requirements at an early stage in order to be prepared for the new PRIIP KID reporting from January 2025 at the latest. Without these regulatory documents, asset managers and wealth managers may no longer be able to offer and sell products from the beginning of 2025.

Content Software advises you on all aspects of preparing your systems and processes for the Arrival-price-method. We support your transition process from initial planning to implementation.

Please contact us for a personal consultation.