The Financial Conduct Authority (FCA) is implementing temporary measures which it says will improve the clarity of cost disclosure by investment companies, and provide customers with more information to make better decisions. 

The announcement comes in the wake of concerns about current disclosure obligations leading to unclear cost information. 

These new measures enable funds to offer additional content, especially in cases where the legislative requirement for an aggregate figure may not accurately represent ongoing costs. 

However, the FCA says these measures are not a long-term solution, and encourages investment companies and funds to incorporate this additional information into their broader disclosure documents as well. 

Looking forward, the FCA says it will pursue changes to the cost-disclosure regime, contingent on legislative adjustments, including the revocation of the PRIIPs (Packaged retail and insurance-based investment products) Regulation. 

With the Treasury committed to repealing relevant MiFID (the Markets in Financial Instruments Directive) cost and charges provisions, the FCA anticipates designing a comprehensive cost disclosure framework, aiming to implement a retail disclosure regime in the future.

In an earlier initiative highlighted by Finance Magnates, the FCA proposed regulations mandating personal investment firms to maintain sufficient capital reserves for compensating consumers affected by inadequate financial advice. 

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The “polluter pays” principle holds firms accountable for the financial consequences of harmful advice, aiming to alleviate the burden on diligent advisors.

In additional regulatory updates, the FCA addressed dormant licenses, impacting over 1,100 business lines. The Q3 report highlighted reviews of 5,300 financial promotions, aligning with stricter rules for crypto assets. 

The FCA also updated guidance for crypto asset firms, providing a transition period for compliance with marketing regulations. These multifaceted initiatives showcase the FCA’s commitment to fostering a transparent and consumer-centric financial environment.