In December 2024, the FCA issued the long-awaited consultation paper following DP22/06. This consultation has not delivered of the majority of points highlighted in our response. That said, there is a recognition that the current disclosure regime can be overwhelming for clients, and flexibility has been incorporated into the rules to allow for additional information and creative presentation.

The consultation proposes a new category of investment, the Consumer Composite Investment. This is a structured deposit, a security or financial instrument which is or embeds a derivative, or which includes features equivalent to a derivative contract, a debt security, a security issued by a fund, or rights or interests in such a security, a contingent convertible security, a contract for difference, an insurance-based investment product, and any other investment where the returns are dependent on the performance or changes in the value of indirect investments.

The proposed regime requires pre and post sale disclosure via a Product Information Summary document. Manufacturers must produce this document and also make core information available to distributors to allow them to enhance, amend or create their own documents. Although the presentation of the document is not templated, the content is heavily prescribed and is likely to result in a longer document than the existing PRIIPS KID.

PIMFA has responded to the FCA expressing concern about the narrow scope of the CCI regime given the breadth of the anticipated review and the interplay with MiFID which has not been considered. The new regime is due to come into effect in the summer of 2025 with an 18 month transition period for the majority of assets. This should align the new requirements with the end of the existing PRIIPS exemption for UCITS. These are tight timescales given the lack of detail in some area of the proposals and the strength of industry feedback.

The FCA has also issued CP24/24 which proposes a transposition of existing EU requirements into handbook text. As part of this consultation, views are sought in relation to the wider disclosure framework, from the information in COBS 2, through the costs and charges information COBS 6, product information COBS 13 and reporting requirements in COBS 16. A discussion paper, DP24/3 also touches on projection requirements for pensions.

Although the full gamut of disclosure is covered across these papers, there is a concern that piecemeal review of the requirements will not be radical enough to improve consumer engagement and understanding. PIMFA continues to suggest that the FCA creates a coherent programme for reviewing disclosure requirements and that the interplay between different disclosures is considered and outputs are aligned.