FCA publishes package to boost UK investment culture

Elizabeth Budd and Chris Riach were commenting after the regulator published a bumper package of proposals ahead of the festive season to strengthen retail investment culture and help consumers take more informed risks.

The wide-ranging package includes a number of significant measures, including a proposal to establish a “clearer boundary” between retail and professional investors which will permit firms to deal with professional investors outside of retail regulations.

Under the proposals, wealthy and experienced individuals with at least £10 million in investable assets will be able to “opt out” of retail protections in a move that is expected to streamline how firms assess professional investors. However, the regulator said this would only work “if firms can demonstrate that their clients genuinely meet the threshold of a professional client and the clients give informed consent”. A consultation on the proposal is open until 2 February 2026.

The FCA also published a separate discussion paper seeking the industry’s views on what else can be done to rebalance consumer risk through regulatory frameworks in light of the UK’s changing retail investment landscape, which has witnessed a surge in interest in speculative high-risk products and a noticeable contraction in peer-to-peer lending. This consultation closes on 6 March 2026.

Within the package, the FCA also outlined plans to implement a new consumer composite investments (CCI) regime, which will replace EU-derived packaged retail investment products (PRIIPs) and Undertakings for Collective Investment in Transferable Securities (UCITS) disclosure requirements for packaged investment products.

The regulator said this will pave the way for a more flexible post-Brexit regime based on the consumer duty in the UK, although this could present challenges for EU firms which are accustomed to a more prescriptive approach under EU legislation.

This announcement follows an industry consultation that concluded in March this year. The optional transition period for the new CCI regime will commence on 6 April 2026. From this date, manufacturers, including institutions which manufacture overseas funds regime (OFR) schemes, will be able to choose between producing a product summary or following the disclosure requirements that currently apply to them. As expected, firms will have an 18-month implementation period before the regime comes fully into force on 8 June 2027.

Commenting on the proposals, Elizabeth Budd, financial services regulation expert at Pinsent Masons, said: “With these reforms it is possible to see the regulation for growth and not merely regulation for risk. Like all large packages at Christmas there is a lot to digest. Whilst the industry may rightly welcome the proposed lightening of the regulatory burden to encourage investment, nonetheless careful thought needs to be applied to how much risk is entering the system across the board.”

Later this week the FCA is also expected to publish new rules for ‘targeted support’ for firms. This follows a consultation undertaken earlier this year that gauged the industry’s views on introducing greater support to help close the advice gap for UK consumers making pensions and retail investment decisions following a steady rise in individuals opening investment accounts and accessing trading platforms without advice.