The FCA has published Policy Statement 17/6: Disclosure rules following application of PRIIPs Regulation (PS17/6). In PS17/6 the FCA summarises and responds to the feedback to its earlier consultation, Consultation Paper 16/18: Changes to disclosure rules in the FCA Handbook to reflect the direct application of PRIIPs Regulation (CP16/18) (our blog is here). It sets out how the FCA’s disclosure requirements will change to reflect the introduction of the Key Information Document (KID) under the Packaged Retail and Insurance-based Investment Products Regulation (PRIIPs Regulation) and sets out final rules and guidance.
PS17/6 is relevant to most firms that provide, advise on, or sell investments or investment services to the UK retail market. In particular, it affects the following:
- firms that manufacture, advise on, or sell retail investment products that fall within the scope of the PRIIPs Regulation – these firms will need to produce, publish or provide KIDs for package retail products, such as funds, insurance-based investments, structured products, derivatives and investments issued by some special purpose vehicles;
- firms that are UCITS management companies – these firms will be required to replace the UCITS key investor information document with the PRIIPs KID after a transitional period;
- firms that are authorised fund managers of non-UCITS retail schemes (NURS) or an investment company with variable capital (ICVC) that is a NURS – these firms will be able to produce a non-UCITS retail scheme-key investor information document as an alternative to the KID for a transitional period;
- firms who, although outside the scope of the PRIIPs Regulation, may want to reconsider their use of colours in retail client disclosure documents;
- firms who currently provide investors in NURS or Qualified Investor Schemes with a Key Features Document or a simplified prospectus; and
- consumers who buy or receive advice on PRIIPs.
Given the delayed application of the PRIIPs Regulation, the FCA’s rules will apply from 1 January 2018, the same day on which the PRIIPs Regulation is expected to take effect.
During this year the FCA will consult separately on changes to the Enforcement Guide and Decision Procedure and Penalties manual (DEPP). This consultation will set out the enforcement approach in relation to investigations under the PRIIPs Regulation, including how the regulator intends to exercise its powers against unauthorised firms alleged to have breached the PRIIPs Regulation. The FCA also plans to consult on amending DEPP to set out the decision-making procedure relating to decisions made under the PRIIPs Regulation.
View PS17/6: Disclosure rules following application of PRIIPs Regulation, 2 May 2017