FCA Announces Plans to Reform Financial Services Retail Disclosure Requirements

On 19th September 2024, the Financial Conduct Authority (FCA) issued a statement outlining its plans to overhaul the existing PRIIPs legislation in the UK. The new framework Consumer Composite Investments aims to enhance flexibility and address long-standing industry concerns, particularly in the area of cost disclosures.

The FCA has announced a consultation scheduled for autumn 2024, with the goal of finalising the new legislation by mid-2025. The proposed reforms are expected to offer greater flexibility across different financial products while directly tackling the concerns expressed by industry participants under the current PRIIPs framework. One of the central focuses of the new regulations will be improved cost transparency.

In a significant move, the FCA also announced that UK Investment Trusts will be exempt from the PRIIPs legislation. In collaboration with the UK Government, the FCA intends to implement this exemption through new legislation. In the meantime, the FCA has confirmed that it will apply regulatory forbearance, meaning that no supervisory action will be taken against Investment Trusts that choose not to comply with PRIIPs in the interim.

Seamus O’Cuill, Head of Investor & Digital Solutions at Funds-Axis, offered his perspective on the potential impact of the upcoming reforms:

“The upcoming consultation and legislative changes could radically reshape how product manufacturers engage with retail investors. We strongly encourage all product manufacturers to participate in this consultation to ensure the outcome is reflective of industry needs and concerns. It will be fascinating to see what changes are introduced, particularly in the realm of customer-facing documentation and whether new technologies, like interactive KIID-type documents, will be adopted alongside traditional print versions.”

He added:

“At Funds-Axis, we are dedicated to supporting our clients throughout these legislative changes. We are fully prepared to adapt our solutions and ensure seamless compliance with the forthcoming regulations.”

Don’t wait until the last minute to prepare for these important changes. At Funds-Axis, we provide comprehensive UCITS KIID/PRIIPs KID document production services and calculation support, ensuring your business remains compliant with evolving regulations.

Contact Seamus O’Cuill today at seamus.ocuill@funds-axis.com to discuss how we can help you navigate these upcoming challenges with ease and confidence.