On 30 September 2024, the Financial Conduct Authority (FCA) published an update to its statement on forbearance in relation to investment trust disclosure requirements. The statement, originally published on 19 September 2024, sets out the FCA’s forbearance given the Government’s intention to exclude some investment trusts from the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation and other assimilated law.

In its update, the FCA flags that:

• The implication of the forbearance is that it applies along the distribution chain to any firm carrying on business relating to these products, including manufacturing, distribution or marketing. All firms must continue to comply with other relevant rules and regulations including the Consumer Duty and the requirements to ensure communications are fair, clear and not misleading. Firms must also comply with the requirements in COBS 2.1.1R to act honestly, fairly and professionally in accordance with the best interests of clients.

• In light of this, firms across the distribution chain will need to consider what approach will deliver good outcomes for their retail clients. The FCA suggests that, where firms choose not to provide a key information document, they may wish to consider whether any additional product information is needed to support retail investors, in line with PRIN 2.A.5.3R(1) requirements to equip consumers with the information to make effective, timely and properly informed decisions.

• Product governance requirements generally require product manufacturers and distributors to share relevant information about the product to ensure it is appropriately distributed, and distributor firms (or any firm preparing communications for retail customers) are also subject to Consumer Duty obligations relating to meeting the information needs of retail customers. In light of the forbearance statement, the FCA expects firms in the distribution chain for securities issued by investment trusts to look to work together to determine and share what information is required to enable the continued distribution of these products, in compliance with their more general obligations towards retail investors, including in particular under the Consumer Duty.