FCA publishes its final rules for Consumer Composite Investments

The Financial Conduct Authority (FCA) has published its final rules for providing information on Consumer Composite Investments (CCIs) in its Policy Statement PS25/20, following its consultations in December 2024 (CP24/30) and April 2025 (CP25/9). The new CCI regime will replace the Packaged Retail and Insurance-based Investment Products (PRIIPs) and Undertakings for Collective Investment in Transferable Securities (UCITS) disclosure requirements with a single framework tailored for the UK market.

This initiative represents a core component of the FCA's strategy to foster a healthier retail investment culture in the UK, which is part of the UK government’s growth agenda. Ensuring consumers are provided with clear and concise information is viewed as fundamental and the FCA has explained that the new rules mark a shift to a more flexible and proportionate approach, allowing firms to innovate and produce more engaging, consumer-centric communications, with the FCA’s consumer duty at the heart of the regime. 

There is an 18-month implementation period before the regime comes fully into force on 8 June 2027. The optional transition period will begin when the legislation commences on 6 April 2026 and from this date, manufacturers will be able to choose between producing a product summary under the new regime or following the current disclosure requirements that apply to them. 

Key changes to the regime

The scope of the new CCI regime is set by the Consumer Composite Investments (Designated Activities) Regulations 2024 which define a CCI as an investment where the returns are dependent on the performance of, or changes in, the value of underlying or reference assets. The regime overhauls the design and delivery of investment information for retail clients by dismantling the rigid, prescriptive approach of the PRIIPs and UCITS regimes.

Product summaries 

The FCA’s view is that the current PRIIPs and UCITS disclosure templates contain excessive amounts of information, are unengaging and typically rely on legalistic financial jargon. It noted that consumers do not usually read these documents and it does not believe they sufficiently help consumers make investment decisions, quoting that in its behavioural testing process, most participants commented that Key Information Documents (KIDs) were not engaging. 

Under the new rules, manufacturers must produce a product summary which contains comparable key information such as costs, risk and return and past performance. The FCA has made amendments to the methodologies for calculating and displaying this information, reflecting the feedback and engagement with firms throughout the consultation processes. While some high-level content remains prescribed, the FCA has given manufacturers significant flexibility over a product summary’s design. The FCA is clear that it expects manufacturers to provide information to consumers simply and clearly, and to use language that consumers can understand. Firms are encouraged to consider how they can test and innovate to produce communications that support better understanding of investing and are appropriate for their target market.  

Responsibilities of manufacturers and distributors 

Under the new regime, the duties of manufacturers and distributors are clearly separated, following a request from respondents to the FCA’s previous consultation papers for clearer lines to be drawn. Manufacturers create the product summary, while distributors are responsible for making it available to investors before a sale and providing it to consumers in a durable medium after any sale. The FCA has clarified that distributors cannot make their own product summaries or change the summaries they receive. However, the FCA wants distributors to build “compelling consumer journeys” that support consumer understanding, so has clarified that pre-sale, distributors have the option to only highlight key information to consumers (not all of the information in a product summary). 

By moving from prescriptive rules to a more principles based approach, the FCA is clearly putting the onus on firms (both in the case of manufacturers and distributors) to use their own judgment when it comes to consumer understanding and compliance with the FCA’s consumer duty. Whilst firms may welcome the flexibility this provides, the loss of a clear safe harbour means that firms may feel that the trade-off for greater flexibility is increased regulatory risk.

Connecting the docs: a post-Brexit and consumer-focused agenda

The introduction of the CCI regime must be viewed within three broader contexts.

Firstly, the new regime is part of the UK’s post-Brexit financial services reform programme and the current UK government’s Financial Services Growth and Competitiveness strategy. Replacing the EU regimes with one tailored for the UK market is a key part of the government's plan to create a more competitive and proportionate regulatory landscape for retail investments in the UK.

Secondly, the new regime is underpinned by the FCA’s consumer duty. The FCA notes that it has "stripped away excessive templating and prescriptive documents" to give firms the freedom to innovate and deliver engaging communications to consumers. The new CCI rules provide a tangible example of how the FCA expects firms to apply the duty’s principles to their communications. 

Finally, the FCA has announced other measures to increase retail investment. The new CCI regime goes hand in hand with the FCA’s proposals on targeted support in pensions and retail investments (for further details please see our blog post on this). In addition, the FCA has announced proposals to amend the rules on client categorisation and conflicts of interest (CP25/36) and published a discussion paper in which it seeks views on what more it can do to ensure its regulations help consumers take informed risks and equip them with the confidence to invest (DP25/3). Taken together, these initiatives reflect a shift towards a more nuanced segmentation of the approach to retail and professional investors. 

Practical impacts and the road ahead

The CCI regime presents opportunities for firms but also implementation challenges:

• Manufacturer and distributor collaboration: The regime's structure necessitates close cooperation between manufacturers and distributors to ensure sufficient information reaches the consumer. This may require manufacturers and distributors to revisit existing co-operation agreements between them.
• Embracing flexibility: The flexibility of the new rules is an opportunity for both manufacturers and distributors to differentiate themselves from competitors through innovative communications. However, it also introduces an element of uncertainty – firms must interpret the FCA’s principles-based requirements under the new regime and be prepared to justify their approach under the consumer duty.
• Dual-regulatory regime: If firms are manufacturing or distributing products in both the EU and the UK, both regulatory regimes may be applicable. The FCA has recognised that there are different methodological and presentational differences under EU PRIIPs and UCITS regimes in respect of disclosure requirements. In addition, the EU regime in this space is still evolving and therefore further divergence between the two regimes is likely (for example, the EU has announced its intention to amend the contents of the PRIIPs KID under its Retail Investment Strategy). As a result, going forwards firms will need to assess how to manage potential discrepancies between the UK and EU regimes and this will inevitably lead to additional costs.

Implementation timeline 

Firms have until 8 June 2027 to familiarise themselves with the new rules and make the necessary changes to their systems and procedures. Manufacturers must develop new processes for creating product summaries, while distributors need to adapt their systems to integrate this new information and ensure effective consumer journeys. Early planning will be critical, particularly for firms with complex products or multiple distribution channels.