HM Treasury Publishes Response on UK Retail Disclosure Consultation

HM Treasury has published a response to its consultation on the future of U.K. retail disclosures. HM Treasury's consultation (which we discussed in our client note, "UK Government Publishes Edinburgh Reforms for Financial Services") identified various problems with the Packaged Retail and Insurance-Based Investment Products Regulation which currently governs disclosures for complex retail investment products. These included that the PRIIPs regime could be overly prescriptive and potentially misleading in its attempts to make PRIIPs products comparable and that the rules were spread across a mixture of legislation and regulatory rules which led to a complex environment for firms.

In its consultation response, HM Treasury confirmed that it would take forward its proposal to entirely remove PRIIPs firm-facing retail disclosure requirements from legislation and replace them with a regime established by U.K. Financial Conduct Authority rules. It plans to publish a draft statutory instrument by 2024 granting the FCA the powers it requires to deliver the new regime. When finalized, the S.I. will take effect once the PRIIPs Regulation has been repealed under the revocation framework established by the U.K. Financial Services and Markets Act 2023 (which we discuss in our client note, "A Boost for U.K. Financial Services: The U.K. Financial Services and Markets Act 2023"). The FCA will publish a consultation paper on its proposed rules for the new regime in due course.

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