The FCA has already proposed a simpler and flexible system which is tailored to the UK to replace current rules, introduced across Europe when the UK was in the EU.
Today, the FCA sets out further plans to boost confidence and drive investment.
More than 12.6 million UK investors (23% of all adults) hold an investment falling within what we call a Consumer Composite Investment (CCI), (FCA Financial Lives survey, 2024).
The FCA said in its first CCI consultation that it would follow up on draft rules about consequential changes to other Handbook materials and draft transitional provisions or amendments to the transaction costs. These matters were not included in the first consultation to prevent a delay but are being consulted on now.
This second consultation covers:
- Removing the requirement for firms to calculate and disclose implicit transaction costs. This would remove a significant compliance requirement for firms, while ensuring that consumers are still provided with the most relevant information about product transaction costs. The FCA is keen to hear views on how to make sure that these costs are understood.
- Simplifying overall cost disclosures by aligning other cost disclosure rules to CCI requirements.
- Consequential amendments to other parts of the FCA Handbook that result from the new CCI rules.
- Provisions for the transitional period until the CCI regime comes into full force.
The proposals together with those in the first consultation set out the FCA’s ambition of building a new, bolder regime and it is open minded about how it can be designed in a way which best meets the needs of prospective investors.
The FCA welcomes views through the consultation about how best to design an outcomes-focused regulation that is fit for many years to come.
The FCA will continue its detailed engagement with a wide range of stakeholders on the issues discussed in this consultation and its wider CCI proposals to create a regime that works for consumers and the wider market. It plans to issue a Policy Statement covering both consultations with final rules in late 2025.
Stakeholders are invited to respond to this paper by 28 May 2025.