Laura WilesThe Government and the FCA have announced plans to replace EU-inherited retail disclosure rules with a framework tailored to UK markets and firms.
HMT previously consulted on replacing the PRIIPs Regulation with a new framework for Consumer Composite Investments (CCIs). It plans to legislate as soon as possible in order to provide the FCA with the requisite powers to bring about the reform. The new CCI regime is set to create more tailored rules, and address industry concerns with the current approach, including relating to costs.
The FCA plans to consult on proposed rules this autumn, and subject to Parliamentary approval, the new disclosure regime is expected to be in place in H1 2025.
The Government and the FCA also noted feedback from the investment trust sector on current cost disclosure requirements. In response to this feedback, the Government plans to exempt listed investment trusts from the current PRIIPs Regulation and make other amendments to EU-assimilated law. This is intended as a temporary measure, as investment trusts will be included within the incoming retail disclosure framework.
In light of the announcement, the FCA will immediately apply new forbearance to give firms certainty prior to the legislation taking effect. Until that point, the FCA will not take supervisory or enforcement action if an investment trust chooses not to follow requirements under the PRIIPs Regulation, associated technical standards and / or related MiFID Org Regulation requirements.