FCA Overhauls UK Retail Investment Rules: £10m Cash Clients Can Opt Out of Consumer Duty

Source: Cryptonews Original Title: FCA lets £10m cash clients opt out of consumer duty safeguards Original Link: https://crypto.news/fca-lets-10m-cash-clients-opt-out-of-consumer-duty-safeguards/

UK Retail Investment Market Reforms

Britain’s Financial Conduct Authority announced comprehensive reforms aimed at increasing retail investment participation while maintaining consumer protections.

Key Changes

The FCA will eliminate European Union-era disclosure requirements under the Packaged Retail and Insurance-based Investment Products (PRIIPs) regulation. These will be replaced with a new Consumer Composite Investments (CCI) framework covering investment funds, investment trusts, and unit-linked life insurance policies.

Approximately 12.5 million UK adults currently hold products that will transition into the CCI framework. The new rules simplify cost disclosures and clarify the relationship between risk and reward. The framework is scheduled to take effect in June 2027.

Professional Investor Classifications

The FCA has overhauled professional client classifications to better distinguish between retail and professional investors. Key updates include:

• Professional clients will no longer be covered by the FCA’s consumer duty, which imposes higher standards of care
• Individuals holding at least £10 million ($13.3 million) in cash can now opt out of consumer protections
• The “quantitative” test (previously based on criteria such as trading at least 10 times per quarter) has been eliminated due to potential for misuse

Industry Context

These reforms represent a significant moment in defining the UK’s post-Brexit regulatory approach to retail investment. The changes aim to make stocks and shares more accessible to individual investors while maintaining appropriate consumer safeguards.