The Financial Conduct Authority (FCA) has launched a consultation on its proposed product information framework for consumer composite investments (CCI).

Under the FCA’s proposed regime, a CCI is an investment where the returns are dependent on the performance of the value of indirect investments, including funds, structured products, insurance-based investment products, contracts for difference, and other ‘complex investments’ like derivatives.

Current rules, introduced when the UK was in the EU, mean that people purchasing investments, such as investment funds, are provided with standardised documents covering prescribed information.

However, the FCA said these documents were often complex and unclear, and it has therefore set out plans to simplify the information supplied in an effort to boost confidence and drive investment.

It proposed replacing this regime with a simpler and more flexible system tailored to the UK, with firms being given more choice about how, what, and when they communicate.

The FCA also set out some detailed requirements where it was “really necessary” to ensure consistency and comparability across the market to help consumers.

The regime will apply to any firm that develops, distributes, or advises on a CCI, such as Packaged Retail and Insurance-based Investment Products (PRIIPs), Undertakings for Collective Investment in Transferable Securities (UCITS) (including overseas funds), non-UCITS retail schemes (NURS), or non-PRIIP packaged products (excluding pensions products), to retail investors in the UK.

Under the proposals, new product information requirements would seek to help consumers understand they products they are buying, while giving firms flexibility to innovate.

Through the CCI regime, the FCA said it wanted consumers to be presented with information that is accurate, understandable, and broadly comparable; engage with product information and use it in their decision-making process; and be able to compare investments more effectively, and more easily find the best product for their needs.

“The way people invest has changed,” stated interim FCA executive director of markets, Simon Walls. “We want to ensure that firms can communicate with their customers in a way that gets them the information they need when they need it.

“High quality product information will give consumers the confidence to invest; increased participation in this market will not only benefit consumers but will also provide capital to drive the economy and boost growth.”

Commenting on the consultation, Investment Association director policy, strategy and innovation, Jonathan Lipkin, said: “Modernising the UK’s retail disclosure regime is fundamental to achieving a new culture of inclusive investment, where consumers feel empowered to make informed decisions that enable them to achieve their long-term financial objectives and build resilience.

“We welcome the FCA’s consultation as an important opportunity to create a disclosure framework based on simplicity, flexibility, and digital innovation. In a Consumer Duty world, we support a customer-centric regime that provides decision-useful information in an accessible and relevant format, and that helps consumers understand investment products and compare them in a meaningful way.

"We look forward to working with the FCA and other stakeholders in developing this new approach."

The consultation closes to responses on 20 March 2025.

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