Michaela
Britain’s Financial Conduct Authority (FCA) has unveiled reforms aimed at boosting retail investment, including scrapping EU-era disclosure rules, updating professional investor classifications, and revising risk frameworks across the investment landscape.
Key Points
- FCA scraps EU-era PRIIPs disclosure rules and introduces a new Consumer Composite Investments framework.
- Professional investor classification is revised, removing consumer duty protections for high-net-worth individuals.
- Reforms aim to make retail investing more accessible while maintaining essential consumer protections.
According to Reuters, the reforms are part of a broader initiative to enhance the retail investment experience, making stocks and shares more accessible and appealing to individual investors while maintaining essential consumer protections.
“This is one of the biggest weeks for UK retail investment in recent history,” Director of Policy, Strategy and Innovation at the Investment Association, Jonathan Lipkin, told Reuters. “It is also, relative to the EU, a moment in time where we more clearly define how we’re going to go forward in a post-Brexit environment,” he added.
The FCA announced plans to eliminate the EU’s prescriptive disclosure rules under the Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation. In their place, the regulator will introduce a new framework for Consumer Composite Investments (CCI), covering products such as investment funds, investment trusts, and unit-linked life insurance policies, which the FCA estimates are held by roughly 12.5 million UK adults.
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Furthermore, the FCA has reportedly been consulting on the CCI framework since last year, and the final rules go beyond initial proposals by simplifying cost disclosures and clarifying the connection between risk and reward. The new framework is set to take effect in June 2027.
The UK regulator also outlined revisions to client classifications to better distinguish between retail and professional investors. Professional clients will no longer be covered by the FCA’s consumer duty, which imposes higher standards of care.
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While the threshold for professional status remains high, individuals holding at least £10 million ($13.3 million) in cash can now opt out of these protections. The FCA is also eliminating the “quantitative” test, previously based on criteria like trading at least 10 times per quarter, citing its potential for misuse.
Looking ahead, the FCA’s reforms signal a shift toward a more flexible, outcomes-focused regulatory environment. By balancing investor protection with simplified rules and clearer classifications, the UK aims to foster a retail investment market that is both accessible and resilient, encouraging smarter participation while adapting to the evolving landscape of modern finance.
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MICHAELA
Michaela is a news writer focused on cryptocurrency and blockchain topics. She prioritizes rigorous research and accuracy to uncover interesting angles and ensure engaging reporting. A lifelong book lover, she applies her passion for reading to deeply explore the constantly evolving crypto world.
