Government publishes PRIIPs replacement legislation

The Government has published draft legislation that will replace the PRIIPs Regulation and create a new UK retail disclosure framework for “consumer composite investments” (CCIs).  The initiative is part of the plan to publish a statutory instrument that will regulate certain common aspects of Designated Activities, which should be published in draft early next year. That instrument will include cross-cutting supervision and enforcement powers across various activities.

Following consultation, the current PRIIPs framework will be replaced with overarching laws, with the firm-facing retail disclosure requirements replaced with FCA rules. Currently exempt UCITS will be within the scope of the new regime (but will provide a transitional period until the end of 2026).

The draft legislation:

• defines new key terms (including the new concept of a CCI);
• defines the “designated activities” that will require firms to provide disclosure to retail investors;
• gives FCA rulemaking and enforcement powers; and
• sets out firms’ civil liability regarding disclosure provided to retail investors.

Treasury asks for comments on the draft statutory instrument by 10 January 2024.