The Financial Conduct Authority (FCA) said services “which allow retail investors to purchase, hold and sell investments as legal or beneficial owner” would not fall under new regulations, known as Priips, which come into force in January 2018.
The news will come as a relief to many discretionary fund management companies as it will exempt them from producing ‘Key Information Documents (Kids) – the flagship requirement of the new packaged retail and insurance-based investment products (Priips) rules, for many trades they do on behalf of clients.
The clarification came in the FCA’s final rules for the application of Priips, published on Tuesday, which aims to standardise disclosure on all forms of investment and comes into force across the EU in January, 2018.
The publication includes numerous FCA handbook adjustments designed to make the regulator’s rules comply with the forthcoming PRIIPs law.
The FCA said respondents to its Priips consultation in July 2016 said Kids should not be required if the client arrangement “only facilitates the purchase, holding and selling of… investments”.
Also out of scope for Priips are “assets that are held directly by the retail investor, such as corporate shares or sovereign bonds”.
