On 30 November 2023, the FCA published a statement on communications in relation to packaged retail and insurance-based investment products (PRIIPs) and undertakings for collective investment in transferable securities (UCITS).
The statement relates to concerns raised about costs and charges disclosure in the PRIIPs Key Information Document, the UCITS Key Investor Information Document and MiFID II requirements. It sets out the FCA’s interim measure, pending broader reform possible through legislative change, to provide for some disaggregation of costs and charges disclosure.
The statement explains that, in order to support better cost disclosure, the FCA will allow funds to provide a factual breakdown of the component parts of their costs. This is intended to enable funds to provide additional context where they are concerned that the aggregate figure currently required by legislation does not accurately reflect ongoing costs.
This measure is not intended as a long-term solution but is a step towards wider reform.
The FCA notes that it also expects firms to consider their obligations under the Consumer Duty, and flags that it is already working towards wider changes to the cost-disclosure regime (subject to legislative change), including the revocation of PRIIPs Regulation.