The UK government and the FCA have announced plans to review regulations on the disclosure of retail information to improve transparency and investor confidence.
This initiative aims to replace the regulation on packaged retail and insurance-based investment products (PRIIPs) inherited from the EU with a tailor-made framework for consumer composite investments (CCIs).
Expected to be passed into law as soon as possible, the new regulations aim to give the FCA the authority to implement these reforms. By addressing concerns raised by the existing PRIIPs framework, the revised rules promise to be more tailored and flexible, which will have a significant impact on how costs and other key information are disclosed to investors.
The new UK retail transaction disclosure regime, which is expected to be in place by the first half of 2025, is subject to parliamentary approval and a consultation process led by the FCA scheduled for this autumn. The consultation will gather the views of a broad range of stakeholders to ensure the CCI’s framework is effective and relevant to market needs.
In addition, the government and the FCA have responded to the investment fund industry’s concerns about current cost disclosure requirements. In particular, investment funds, which make up over 30% of the FTSE 250 and manage over £260 billion in assets, will soon be granted an exemption from existing PRIIP regulations until the new framework is fully implemented. This exemption is part of broader efforts to refine financial regulations to better address the diverse range of financial instruments and investment vehicles.
In light of these regulatory updates, the FCA has introduced a forbearance measure effective from 19 September. Until the new amendments are adopted, no supervisory or enforcement action will be taken against investment funds that deviate from the PRIIPs standards. This interim measure underlines the FCA’s commitment to a smooth transition to a more effective and inclusive regulatory environment.
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