Compliance Corner: FCA Looks At Life After PRIIPs

Editorial Staff

14 December 2022

The UK’s Financial Conduct Authority is looking at overhauling European Union rules which stipulate how people receive information about investments and insurance products.

The regulator, which is issuing a discussion paper on changing the rules, has set a deadline for comments of 7 March 2023.

After Brexit, the watchdog is being asked to revise how rules known as PRIIPs now operate.

“The current rules make it very difficult for consumers to get the information they need in the way they need it to help them make effective investment decisions. We now have the flexibility to design a new regime which is less rigid and more focused on the outcome we are seeking – we want consumers to have the confidence to invest and understand the levels of risk involved,” Sarah Pritchard, executive director of markets at the FCA, said.

The regulator's initiative coincides with UK Chancellor of the Exchequer Jeremy Hunt’s recently-stated desire to loosen EU-legacy red tape on UK financial services. In recent years there were concerns that Brexit would trigger a mass exodus of people and capital to the EU. However, the change has not been that dramatic. Conservative MPs want the government to take more advantage of the regulatory freedom that Brexit is said to give.

The FCA is seeking views on when and in what format information should be delivered to consumers to ensure that it is useful and supports the experience of buying a product. The FCA is also considering who should be responsible for producing disclosure.

The regulator has already changed some PRIIPs rules after Brexit. In the meantime, firms must still follow PRIIPs and UCITS disclosure requirements until the new UK regime comes into effect.