The standards for the information disclosed to potential investors are included in rules known as the Packaged Retail Investments and Insurance Products (PRIIPs) regime and the Undertaking of Collective Investment in Transferable Securities rules, which were created while the UK was in the EU.

The FCA will now be responsible for designing and developing new disclosure rules which meet the needs of the UK market and supports investors to make informed investment decisions. This would include how much information to include about costs and charges and level of investment risk.

Sarah Pritchard, executive director of markets at the FCA, said: “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.

“This discussion paper aims to seek views from industry and consumers to help us design a disclosure regime that delivers to support that aim, and we welcome views from across the market to help us do so.”

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

Presentation is key in order to get consumers to engage with the information they are provided. The FCA is interested in how information could be presented to consumers better including more interactive disclosure and whether to introduce the practice of layering, where firms to include some information upfront with more detailed information provided later in the process.

The FCA has already made changes to the PRIIPs rules post-Brexit in order to address some of the areas of harm which post the most risk to consumers. Firms will still be required to follow PRIIPs and UCTIS disclosure requirements until the new regime comes into effect.

The FCA is asking for comments on the Discussion Paper by 7 March 2023.