The Importance of the Key Information Document (KID) and Its Impact on Trading
The Key Information Document (KID), also known as the basic information sheet, is a central tool for promoting transparency in the financial market. It provides retail investors with clear information about financial products, including their features, risks, potential returns, and costs.
Contents of a KID:
- Product Description: Goals and characteristics of the financial instrument.
- Risks and Returns: Presentation of potential risks.
- Costs: Breakdown of costs associated with the product.
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Performance Scenarios: Possible future performance developments.
Tradability of Financial Instruments:
KID is required to sell certain investment products to retail investors. Without a KID, these products may be restricted for retail investors. Reasons for this can include the complexity of the product or regulatory requirements.
Conclusion:
The KID protects investors by ensuring they only invest in products they understand. For financial institutions, this means they must ensure that all necessary documentation is in place to offer their products.
The message "Exposure cannot be increased due to instrument configuration" will appear, if you place an order for mentioned instruments:
You can check if an instrument has the required KIDs in the trading conditions under Trading rates > Key Information Document.