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Attention Distribution of Current Key Investor Documents: Standardization as a Long-Term Goal of the PRIIP Regulation

Abstract

The regulation of financial products is generally increasing in response to misconduct or crises that have led to losses for (retail) investors. Under the guise of various directives and laws, international and national regulators have introduced rules and standards to restore investor confidence. We tested the success of these efforts by analysing the distribution of attention in current product information sheets in an eye-tracking experiment. The results suggest that regulation has been successful as attention profiles of the different sections of product information are highly similar for different products. This suggests first success of regulation with respect to the standardization of product information sheets. However, this increased comparability does not necessarily lead to an improvement in the investment decisions of private investors, as a further aim of regulation, the increase in comprehensibility cannot be confirmed by this investigation.

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Data Availability

We provide the stimulus material used in an online repository: https://osf.io/zqj5u/. There, we also make eye-tracking raw data, processing script, and the areas of interest available.

Notes

  1. 1.

    For further information see, e.g., Duchowski (2017).

  2. 2.

    DDV forms the umbrella organization and the representation of interests of issuers of structured securities in Germany.

  3. 3.

    Retrieved from https://www.derivateverband.de/DE/MediaLibrary/Document/Statistics/2019/06 Marktvolumen- Juni 2019, EN.pdf.

  4. 4.

    Retrieved from DDV statistics from June 2019, https://www.derivateverband.de/DE/Media Library/Document/ Statistics/2019/062019 Marktanteile, 2. Quartal 2019, EN.pdf.

  5. 5.

    Art. 8 of (EU) Regulation No 1286/2014.

  6. 6.

    This template is available at https://www.derivateverband.de/DE/MediaLibrary/Document/Muster/Discount-Zertifikat-e.pdf. We provide the stimulus material used in an online repository: https://osf.io/zqj5u/. There, we also make eye-tracking raw data, processing script, and the areas of interest available.

  7. 7.

    The interviews were carried out by means of Likert scales, which range from 1 (very incomprehensible/very unimportant) to 5 (very understandable/very important).

  8. 8.

    Detailed information is given in Table 4 in the Appendix.

  9. 9.

    For comparison, the mean absolute fixation times are given in Table 5 in the Appendix.

  10. 10.

    Due to the data structure the Fisher-Transformation was used, as proposed by Silver and Dunlap (1987).

  11. 11.

    Significance on 1% and 5% level.

  12. 12.

    See https://www.bafin.de/dok/9268082.

  13. 13.

    Specifically, these were the following discount certificates, indicated by the respective ISIN: DE000PP9KQ00 of BNP Paribas, DE000CJ7MQU0 of Commerzbank, DE000DD9SA0 of DZ Bank and DE000GD74J50, issued by Goldman Sachs Available on the respective pages of the issuers.

  14. 14.

    Here we deliberately use the aggregated values to exclude individual learning effects of the test persons. Further Information is shown in Table 6 in the Appendix.

  15. 15.

    The ratio given corresponds to an F-test with 3 and 26 df with significance at a level of 0.1%.

  16. 16.

    The relative fixation times were used here to exclude individual reading speed from the evaluation.

  17. 17.

    The lack of understanding of the rest of the product could be explained on the basis of the more easily understandable costs in terms of the resolution of cognitive dissonance (Festinger 1957).

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Acknowledgements

We are grateful to Rainer Baule for discussion of earlier versions of this article and to Christina Weckwerth for help with data acquisition.

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Correspondence to P. Münchhalfen.

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Appendix

Appendix

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Table 4 Relative fixation times. These result from the relative proportions of the areas in the entire KID. On the left, you find the summed values of the sections, and on the right, the more detailed representation on the level of the areas
Table 5 Mean absolute fixation times. The table shows the mean absolute fixation times in seconds based on sections and areas
Table 6 Absolute fixation times in seconds. These are the summed values over all participants, separated by the issuer. On the left, you find the summed values of the sections and on the right side is the more detailed presentation on the level of the areas
Table 7 Correlation analysis results. The individual fixation times (relative to the time used overall) are correlated with the information on the importance and comprehensibility of individual product attributes and the KID. The table focuses on the three relevant sections. Significances are marked * (p = 10%) and ** (p = 5%). There are further significant connections to other sections, which are not analysed here

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Münchhalfen, P., Gaschler, R. Attention Distribution of Current Key Investor Documents: Standardization as a Long-Term Goal of the PRIIP Regulation. J Consum Policy 44, 73–94 (2021). https://doi.org/10.1007/s10603-020-09473-x

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Keywords

  • Retail investor
  • PRIIPs regulation
  • Attention distribution
  • Eye-tracking