The Financial Conduct Authority (FCA) has released two crucial consultation papers outlining proposed changes to the current regulatory framework for investment products in the UK. The new regime, known as Consumer Composite Investments (CCI), aims to replace the existing PRIIPs Key Information Document (KID) and UCITS Key Investor Information Documents (KIID) with a more standardised and transparent product information framework.
The two key consultation papers are:
- CP24/30: A New Product Information Framework for Consumer Composite Investments
- CP25/9: Further Proposals on Product Information for Consumer Composite Investments
This blog series will explore the key changes proposed by the FCA, particularly the implications for investment fund manufacturers, distributors, and investors.
What is Consumer Composite Investments (CCI)?
The proposed CCI regime introduces significant changes to how investment products are presented, with a focus on improving transparency and comparability. The FCA aims to provide clearer and more consistent product information that will make it easier for retail investors to make informed investment decisions.
Some of the key changes proposed include:
- Standardised Cost and Risk Metrics: The new disclosure rules include specific calculations for cost and risk metrics, which will be presented in a clear and standardised manner.
- Focus on Retail Investors: The CCI framework is designed to provide better information to retail investors by simplifying complex product disclosures.
- Broad Scope: The CCI framework will apply to a wide range of investment products, including funds, securities, and other investment vehicles.
What Do the Proposed Consultation Papers Mean for the Industry?
The FCA’s proposals will impact the way that product manufacturers and distributors operate. Manufacturers will need to adapt to new cost and risk disclosure requirements, while distributors will need to ensure they fully understand the new formats and comply with the updated rules. The transition from PRIIPs and UCITS KIDs to the new CCI regime will require significant effort across the industry.
At Funds-Axis, we are committed to helping our clients navigate these changes. Our team of experts is already working through the details of the consultation papers to ensure we can offer guidance and solutions that make the transition smoother.
Next Steps:
In the coming weeks, we will release additional posts in this series that dive deeper into the implications of the FCA’s proposals. Stay tuned for Blog Series 1: An Overview of Cost Proposals, where we will explore the specifics of cost disclosures under the new regime.
