UK FCA policy statement and final rules on new consumer composite investment regime

The UK Financial Conduct Authority (FCA) has published policy statement PS25/20 as part of a set of publications forming a "landmark package to boost UK investment culture". The policy statement follows the FCA's consultations on the new regime for consumer composite investments (CCIs), which is a new domestic regime to replace the legacy EU regimes for packaged retail and insurance-based investment products and disclosures in respect of undertakings for collective investment in transferable securities, in December 2024 and April this year. The policy statement confirms that the following areas were the subject of substantive feedback and so have been addressed in the final rules.

This includes:

• Clarification of the scope of the regime, including in relation to corporate bonds.
• Simpler criteria for non-retail products.
• Adjustments to information and disclosure requirements, including in relation to costs and charges.
• Updates to distributor requirements, including limiting distributors' ability to make their own product summaries or amend manufacturers' product summaries.
• Confirmation of an 18-month implementation period, but with the option for manufacturers to move to the new CCI regime earlier, once the legislation commences on 6 April 2026.
• Modification of the rules on risk and return to reflect feedback, including for structured products using a value-at-risk volatility model.
• Updates to reflect the FCA's extensive engagement with industry on the treatment of closed ended investment funds.

The final rules will come into effect on 8 June 2027. There is an optional transitional period which will begin when the legislation commences on 6 April 2026, at which point manufacturers may choose to comply with the new CCI product summary requirements rather than their current disclosure requirements.

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