Britain’s Financial Conduct Authority (FCA) has revealed a package of reforms designed to encourage retail investors to increase their holdings of shares and bonds. The move represents one of the clearest statements yet on the direction of post-Brexit investment regulation in the UK. The FCA published three papers outlining plans to scrap EU-inherited investment disclosure requirements, update the categorisation of professional investors, and rethink risk in the investment landscape. These measures are intended to make investing more appealing and accessible to individuals, while reinforcing necessary protections.
The FCA confirmed it would replace the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation with a new regime for Consumer Composite Investments (CCI), covering products such as investment funds and unit-linked life insurance policies. The final rules, effective from June 8, 2027, simplify cost disclosures and clarify the link between risk and reward. Changes are also being made to how clients are classified, sharpening the distinction between retail and professional investors. Individuals with at least £10 million in cash can opt out of consumer duty protections. The FCA is also removing the “quantitative” test, which it deemed open to abuse.
The regulator will also reassess the warnings consumers see before investing in certain products, aiming to encourage more informed risk-taking. It wants consumers to understand the “opportunity cost” of holding assets in cash. Additional measures may be implemented to curb “gamification” in trading apps and address risks from crypto hoarding companies. Later this week, the FCA will issue final rules clarifying the boundary between regulated financial advice and cheaper forms of guidance. A new category, “targeted support”, will allow firms to suggest actions to groups such as those holding excess cash or failing to save enough for retirement.
