AIC welcomes delay to proposed changes to Key Information Documents (KIDs)

The Association of Investment Companies (AIC) has responded to the FCA’s announcement of a delay to the proposed changes to Key Information Documents (KIDs).

In its Consultation Paper CP21/23, PRIIPs – Proposed scope rules and amendments to Regulatory Technical Standards the FCA anticipated that the proposed new KIDs rules¹ would take effect in January 2022. However, the FCA has now announced² it will confirm in Q1 2022 when the rules will take effect along with any implementation period.

Richard Stone, Chief Executive of the Association of Investment Companies (AIC), said: “We are encouraged that the FCA has listened to industry concerns and is taking its time to get the changes to KIDs right. This will give the regulator breathing space to consider how best to change KIDs to help investors make better decisions. We hope one option being considered is bringing KIDs’ performance disclosures in line with those of UCITS funds.

“Getting more people involved in investing is a goal which policymakers and the industry share. But to make it work, consumers must have confidence in the products they’re offered, and this can only happen if they have reliable and accessible information. That’s something that KIDs do not provide.

“The FCA has recognised the need for reform but it can only do so much. The Treasury should play its part and launch the promised review of consumer disclosures to bring all investment products into an effective disclosure regime. Brexit has given the government the chance to do things better and we urge it not to delay any further.”

-ENDS-

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Notes to editors

1. In its Consultation Paper CP21/23 the FCA proposed amendments to the Packaged Retail and Insurance based Investment Products (PRIIPs) disclosure regime to address misleading performance scenarios and summary risk indicators in KIDs. These included replacing performance scenarios with a narrative description of the factors likely to affect future performance and a requirement for KID providers to upgrade their product’s summary risk indicator (SRI) if they consider the risk rating produced by the methodology is too low. The AIC responded to the Consultation Paper CP21/23 on 18 October 2021.
2. FCA Regulatory Initiatives Grid, November 2021, page 39.
3. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 364 members and the industry has total assets of approximately £259 billion.
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