Final CCI Rules: All change for retail investment products’ pre-sale disclosures

Author: Mikkel Bates, Senior Board Adviser, FundSense

On 8 December, the FCA published its final rules on pre-contractual “product summaries” for CCIs, its chosen term to replace UCITS and PRIIPs.  On the back of 320 responses to its Consultation Papers CP24/30 and CP25/9, it was almost inevitable that the final rules would look different from the earlier proposals.

The long, painful birth and short, troubled life of PRIIPs KIDs have shown how hard it is to devise a standardised template and consistent, comparable calculations for such a wide range of products, so it is good to see that the rules allow for a good degree of flexibility.  It is likely that the acknowledgement as far back as the FCA’s 2017 Asset Management Market Study that “under 3% of retail investors read regulated pre-contractual fund disclosure documents” has been at the front of mind throughout the latest rule-making process.

The scope of what is or is not a CCI has been clarified further.  The high-level definition of a CCI is the same as a PRIIP, ie a product made available to retail investors “where the returns are dependent on the performance of, or changes in, the value of underlying or reference assets”.  The PS helpfully includes a (non-exhaustive) list:

In scope	Out of scope
Open-ended funds Closed-ended funds, eg investment trusts Insurance-based investment products Structured products Contracts for difference (CFDs) Derivatives available to retail investors	“Vanilla” corporate bonds Pension products Pure protection insurance products Bonds tracking EURIBOR and other Interbank Offered Rates Non-retail products where the literature makes this clear and where steps are taken to avoid retail investors

What will product summaries look like and what will they contain?

1.        No fixed template

As long as they meet minimum content requirements, firms may produce their own product summaries, with an emphasis on simplicity, clarity and plain language.  No more complex, legalistic documents that nobody reads.

The PS states: “Firms should consider how they can test and innovate to produce communications that support better understanding of investing and are appropriate for their target market.”

2.        Standardised core metrics

Key metrics of costs, risk/return and past performance must follow strict rules to ensure comparability, but firms may add information they believe is useful.

3.        Changes to the presentation of costs & charges

A single headline Ongoing Costs Figure must be presented, both as a percentage and in pounds and pence, with one-off costs and transaction costs shown separately.

4.        Calculation and presentation of risk & return

The Summary Risk Indicator (SRI) on PRIIPs KIDs is to become a risk and return score, highlighting the balance between risk and reward.  It will be based on the volatility of returns over the previous 10 years, rather than 5 (using proxy returns, if necessary).

Structured products will use VAR-equivalent volatility (VEV), as historical volatility is meaningless.

Illiquid products need to increase the risk & return score by at least one level, but not automatically adopt the highest score.

My suggestion in response to the PRIIPs consultation a decade ago for a scale from 1 to 10 (instead of 1 to 7) is finally to be adopted to cater for everything from money market funds to products where you risk more than your original investment. 

Fears of frequent moves between scores have been allayed by only needing to be updated as part of the general annual review.

There must be a clear explanation of what the risk and return score shows, together with any appropriate warnings.

5.        Performance

Both performance scenarios (EU PRIIPs KIDs) and factors that could affect future performance (UK PRIIPs KIDs) are going, replaced by the well-understood past performance. 

Performance is to be illustrated by a line graph covering between 3 months and 10 years (depending on the life of the fund) with monthly data points.

Instead of showing complete calendar years, the graph should start at the launch date and end no more than 60 days before the document is produced.

Investment trusts must show both the historical share price and NAV.

Only product manufacturers will be able to produce a product summary and distributors must deliver these, unamended, to the consumer in a durable medium.  Distributors must highlight, pre-sale, at least a brief explanation of the product, its costs, risk and return profile and any other key risks, and they may add any information they feel is important to a particular customer.  The product summary itself may not be provided to the investor until shortly after the sale, if the distributor believes this would be in the client’s interest.

As you can see from all of the above, risk/return and performance have been the most challenging – and most challenged – aspects of existing disclosures and have required the most work to come up with a consumer-friendly and useful solution for all products. 

For consumers, the changes should mean more usable information presented in a user-friendly style, clearer representation of the risks and less legalistic and overwhelming documentation.

For product manufacturers, the set-up of CCI product summaries will need even more work than PRIIPs KIDs and UCITS KIIDs, as it is up to the product manufacturer to design something that is clear, consumer-friendly and useful to more than the 3% who currently read such documents.  Manufacturers might look to undertake consumer testing to see what works best and, of course, they need to keep records of any testing and of the calculations used in the document.

Timing

The clock started ticking on 8 December and the deadline is in 18 months’ time, with the new rules fully in force on 8 June 2027.  The FCA accepts that the current PRIIPs KID rules are pretty much universally unpopular, so manufacturers and distributors that can do so may move to the new regime at any time after 6 April 2026.

The impact on asset managers of carrying out the necessary calculations with reliable data and producing usable documents should not be underestimated.  Even meeting an 18-month deadline could be challenging.  FundSense helps firms move from fragmented, manual documentation to pulling everything together into consistent, auditable workflows. 

Next Steps

The direction of the CCI framework is now well established. Preparing early will reduce friction later - across processes, documentation, and operational governance.

Whether you are reviewing internal workflows, assessing the readiness of your fund documentation, or considering a managed service approach, FundSense is designed to support a structured and scalable transition.

Contact us to see how FundSense can reduce your compliance risk and operational pain under the new Consumer Composite Investments product summary regime.