The new regime applies to any firm that manufactures or distributes a CCI to retail investors in the UK. This includes funds, structured products, insurance-based investment products, contracts for difference and other complex investments like derivatives.
In response to the consultation, Simon Harrington, Head of Public Affairs at PIMFA, comments: “These new proposals are a welcome step in the right direction. We’re pleased to see that the approach being proposed here takes on board the feedback we shared as part of our response to the FCA’s initial consultation.
“Our concern with the initial CCI regime proposals was that they were overly complex and prescriptive, and didn’t move things on from previous PRIIPs (Packaged Retail Investment and Insurance-based Products) requirements enough. In particular, we had highlighted a lack of clarity for firms on what the Regulator was proposing around MiFID (Markets in Financial Instruments Directive) related activity as well as transaction costs.
“It is therefore extremely encouraging to see FCA's movement on this issue and its intention to remove the requirement for firms to disclose implicit transaction costs as part of its costs disclosures.
“We will continue to study these proposals in consultation with members but on first reading, the new approach to transaction costs in particular should support the Regulator’s overall aim of reducing the risk of misleading consumers and distorting fund manager behaviour.”
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