Key Information Document
Brokers & RegulationA standardised pre-trade disclosure with a fixed risk scale, modelled scenarios and a cost table — the rare document that compares like for like.
A key information document, usually shortened to KID, is a short standardised disclosure that certain regimes require before a retail client can trade a packaged leveraged product such as a CFD. Its format is prescribed rather than chosen by the firm: a summary risk indicator on a fixed scale, performance scenarios under favourable, moderate, unfavourable and stress conditions, a breakdown of costs over a stated holding period, and the recommended holding period itself.
Its value is comparability. Because the layout and the assumptions are dictated, the cost table for one instrument at one firm can be set beside another's and read as like for like, which no marketing page allows. Two cautions travel with it. The scenarios are modelled rather than promised, and they have been criticised for looking optimistic when they are generated in calm markets. And a KID is written per instrument and per entity, so the one to read is the one for the instrument you intend to trade, issued by the entity your account is actually with.