Financial Conduct Authority (FCA) has proposed significant changes to the way investment products are communicated to consumers.
These proposals are set to replace the current EU-derived standards with a more flexible, tailor-made system designed to enhance consumer understanding and trust in investment opportunities.
The current investment documents, often criticized for their complexity and lack of clarity, might be replaced under the FCA’s new guidelines, which advocate for a simpler and more adaptable approach. By granting firms the liberty to decide the content, timing, and method of their communications, the FCA aims to make investment information more accessible and useful, thereby encouraging more informed decision-making among investors.
Simon Walls, interim executive director of markets at the FCA, emphasized the importance of adapting to the changing dynamics of how people invest. “The way people invest has changed. We want to ensure that firms can communicate with their customers in a way that gets them the information they need when they need it,” Walls said. He highlighted that “High quality product information will give consumers the confidence to invest; increased participation in this market will not only benefit consumers but will also provide capital to drive the economy and boost growth.”
These proposed reforms are part of the FCA’s broader ambition to establish a ‘new, bolder regime’ that is outcome-focused and equipped to meet the future needs of the market. The authority is currently welcoming feedback on these proposals, seeking inputs on how to best design a regulation system that is robust and effective for years to come.
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