We support the FCA's ambition to adopt a more straightforward and clearer framework for Consumer Composite Investments (CCIs). The proposed changes will help to empower consumers and support firms in developing understandable, engaging, and broadly comparable information on these investments.
Our response sets out the need for:
- A risk-balanced approach: The FCA should provide clarity on how it will take a risk-balanced approach to supervisory action as the regime is embedded and across all retail investment reforms.
- International competitiveness: The new framework should strike the right balance between UK-based firms and non-UK based firms subject to the Overseas Funds Regime (OFR).
- An alternative approach to cost calculation: The FCA should reconsider the cost calculation method in the consultation, limiting portfolio transaction cost disclosure to explicit costs only.
- A joint industry regulator initiative to refine the proposals: The FCA should consider a joint industry regulator initiative to ensure the product summary is fit for purpose.
We believe that the proposed framework for CCIs will have a normative effect on retail investment practices. It is therefore important that the proposals strike the right balance between providing necessary information to investors and ensuring a less prescriptive regime for manufacturers and distributors. We look forward to engaging with the FCA as they continue to develop the regime.