On 30 September 2024, the Financial Conduct Authority (FCA) published an updated version of its statement on forbearance in relation to investment trust disclosure requirements.
Earlier this month the regulator announced that from19 September 2024 until such time as legislation to amend the PRIIPs Regulation comes into force, closed-ended investment funds, VCTs and REITs whose ordinary shares are admitted to trading on a UK regulated market or a UK multilateral trading facility may choose not to follow the requirements of the PRIIPs Regulation and associated technical standards.
It also confirmed that it would not take supervisory or enforcement action if a fund chose not to follow the requirements.
In its latest statement the FCA has now clarified that the forbearance applies along the distribution chain to any firm whose business relates to these investment products, including those involved in manufacturing, distribution or marketing. These firms however must continue to comply with other relevant rules and regulations including the Consumer Duty and the requirement to ensure their communications are fair, and not misleading. Additionally firms must continue to act in an honest and professional manner in the best interests of retail clients.
Additionally these firms can now decide not to provide a key information document (KID), but in such cases they should consider whether any additional product information is needed in order that retail customers can still make well informed investment decisions in the absence of this document.
The FCA still expects all firms in the distribution chain to collaborate in order to determine what information is required to ensure the continued distribution of retail products whilst meeting their regulatory obligations towards retail investors, particularly those laid out in the Consumer Duty.
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