The Financial Conduct Authority (FCA) closed a consultation on the Packaged Retail and Insurance based Investment Products (PRIIPs) disclosure regime on 30 September.
However, the AIC has said the proposals in the consultation, CP21/23, “do not resolve these issues” and “enough is enough”.
In its response to this consultation the AIC also called for a meaningful review and voiced concerns about the FCA’s proposed timetable to introduce its changes in January 2022.
“There was ample time for consultation and consideration of possible reforms before the FCA was granted its powers under the Financial Services Act 2021. Given the lack of urgency shown by the FCA to date, a more appropriate approach would be to suspend the disclosures so that full consideration can be given to the changes required to be made to the KID as part of a full review of consumer disclosures.”
HM Treasury committed to a wholesale review of the regulation in July 2020, which the AIC said it was still awaiting progress on.
In June HMT said UCITS funds providers can continue to produce Key Investor Information Documents (KIID), as set out in the UCITS Directive, until the end of December 2026.
Investment companies, however, have had to produce KIDs for the past four years and must continue to do so.
Richard Stone, Chief Executive of the AIC said: “The FCA acknowledges the harm KIDs pose to consumers. Rather than tinkering around the edges, the Treasury should conduct a full-scale review of the PRIIPs regulation. Until that happens, KIDs should be suspended.
“Far from helping people make better informed decisions, these documents are misleading investors and distorting the market, with UCITS funds still producing an entirely different disclosure that is not comparable.
“We call on the Chancellor to announce a more meaningful review alongside the Autumn Budget.”