Understanding the new UK Consumer Composite Investments regime: what firms need to know

A new retail product disclosure regime comes into force in the UK in April this year (to run in parallel with the current regime until June next year). The Consumer Composite Investments (Designated Activities) Regulations 2024 (as amended) (CCI Regulations) and new rules in the FCA Handbook (including in the Product Disclosure sourcebook (DISC) and other amended sourcebooks) create a new legislative framework for Consumer Composite Investments (CCIs) which will replace the existing EU-derived UK PRIIPs regime and UCITS disclosure rules.

The aim of the new CCI regime is to move away from the current prescriptive format requirements to allow firms greater flexibility in how they provide information to UK consumers. However, the FCA has set out standardised requirements for information considered to be essential, so that consumers can compare information that is calculated to common standards on costs, risk and return, and past performance.

Firms in scope of the regime include those that manufacture or distribute CCIs to UK retail investors, which means that both UK authorised firms as well as unregulated firms are potentially captured. The FCA has explicitly confirmed that the new CCI regime will apply to overseas firms that wish to promote products to UK consumers, for example, overseas UCITS funds marketing to retail investors in the UK via the Overseas Funds Regime (OFR).

What is a CCI?

A CCI is defined in the CCI Regulations as:

"an investment or a contract of insurance, or any right to or interest in an investment or a contract of insurance, where the value or amount payable to the investor is subject to fluctuations because of exposure to reference values or to the performance of one or more assets which are not directly purchased by the investor."

The FCA has listed products which will be CCIs, including:

• structured deposits;
• structured products;
• securities or financial instruments which are, or embed a derivative; and
• securities issued by a fund, contracts for difference and any other investments where the returns are dependent on the performance or changes in the value of indirect investments.

The examples listed by the FCA are not exhaustive and firms will need to consider whether their products are CCIs.

Helpfully, the CCI Regulations and FCA rules explicitly exclude certain products from the scope of CCIs, including vanilla corporate bonds, pension products, units in authorised contractual schemes or in qualified investor schemes and pure protection insurance contracts.

What are the new CCI disclosure rules ? 

Under the new CCI regime, a manufacturer of a CCI must prepare a 'consumer friendly' product summary and provide (in machine readable format) the underlying core information disclosures, in good time before the CCI is made available for distribution to retail investors in the UK.

Product summary

The product summary will replace PRIIPs KIDs, UCITS KIIDs and NURS-KIIs whenever a CCI is to be distributed to a retail investor in the UK.  

The new CCI regime sets out certain disclosure requirements together with some flexibility to enable manufacturers to use their judgment to create disclosures and journeys that support consumer understanding.

The product summary must include the following;

1. a short description of the product’s investment objectives and investment policy;
2. information about risk and return including the level of risk from a 1-10 risk scale;
3. information about past performance;
4. information about costs and charges;
5. identifying information about the product;
6. information on who prepared the product summary and the date it was issued; and
7. information about Financial Ombudsman and Financial Services Compensation Scheme (FSCS) eligibility etc.

This must be reviewed and updated at least once a year.

Consumer Duty

In addition to the required content disclosures, the Consumer Duty will apply to UK firms in respect of the design and delivery of the disclosures. UK firms may wish to consider layering of additional information and interactive disclosures.

Designated Activities Regime

The new CCI regime will be delivered using the Designated Activities Regime (DAR) under Part 5A of FSMA, which is a new regime brought in by the Financial Services and Markets Act 2023 (FSMA 2023).

Under the DAR, the Treasury designates certain activities to be in scope, and firms wishing to undertake such designated activities will be subject to FCA rules but will not necessarily need to be authorised to carry out such activities. The effect is to extend the FCA's existing supervision and enforcement powers, meaning that firms carrying on a designated activity such as manufacturing or offering CCIs will be required to follow certain rules, except where they are specifically exempt.

The following four activities will now constitute designated activities in relation to CCIs:

1. manufacturing CCIs made available to retail investors located in the UK which includes not only creating, developing, issuing or managing a CCI, but also making changes to a term, condition or feature of a CCI;
2. advising retail investors located in the UK, or their agent, on CCIs to include giving advice on the merits of selling, subscribing for, exchanging, holding or redeeming a CCI or entering into an agreement relating to a CCI;
3. offering CCIs to retail investors located in the UK this is broadly defined and extends to the communication of sufficient information on the CCI and the terms on which it is offered, to enable a person to decide to buy, subscribe for or enter into an agreement relating to the CCI; and
4. selling CCIs to retail investors located in the UK.

Who do the new rules apply to?

Manufacturers

Manufacturers will be responsible for preparing the standalone consumer friendly product summary (to be available on a publicly accessible website) and also, in machine readable format, the general product information, costs and charges, performance, and risk information.

The manufacturer must then provide this product summary along with the underlying core information to the distributors of the CCI in good time before the product can be distributed to retail customers in the UK. These requirements also apply to unauthorised manufacturers, including overseas firms where the CCIs are to be distributed to retail investors in the UK .

Distributors

Distributors must make the product summary available to consumers, unamended, in a durable medium at the point of sale or shortly after. Distributors must not direct or sell any CCI products that do not have an up-to-date product summary to a UK retail client. Helpfully the FCA decided against allowing or requiring distributors to make their own product summaries.

Distributors must highlight key information to help consumers make effective decisions. At a minimum this should include a brief explanation of the product, the ongoing costs figure and other relevant eg one-off costs, the risk and reward score, relevant material risks and any applicable warnings.

Financial Promotions

The CCI Regulations will remove the exemption for persons advising on or selling PRIIPs from the financial promotion restriction under section 21(1) of the Financial Services and Markets Act 2000 (FSMA) and the scheme promotion restriction under section 238(1) of FSMA when providing a KID.

This means that the provision of information required under the CCI regime may constitute a financial promotion or scheme promotion. Unauthorised firms who might want to issue the product summaries would need such documents approved by a UK authorised firm with the s21 permission to do so, or be able to rely on an exemption to the financial promotion restriction.

What is the impact for funds in the OFR?

EU UCITS funds marketed into the UK under the OFR will be in scope of the CCI regime where they are marketed or made available to UK retail investors.

Firms involved will need to assess which firm is carrying on the designated activity of acting as the manufacturer of the EU UCITS fund and hence responsible for producing the product summary and other disclosures.

The FCA recognises that more than one party may be involved in manufacturing a product, and in that case the FCA expects them to agree the division of their responsibilities in writing, and this would include where one firm is solely responsible for preparing the product summary and providing to distributors the underlying core information disclosures. Where the manufacturer with responsibility for these tasks is not an FCA authorised firm, the financial promotion aspect needs to be addressed.

Helpfully, the FCA recognised that OFR funds operate in jurisdictions that the Treasury are satisfied have met the equivalent protection test and therefore decided to take OFR manufacturers out of the requirements to follow a number of the FCA Principles for Businesses and product governance standards (which was proposed originally).

Who is out of scope of the CCI regime ?

The new CCI rules do not apply in relation to a CCI where it is distributed to investors who are not retail investors, or who are not in the United Kingdom.

The rules make clear that a CCI will not be subject to DISC where:

• communications and marketing materials are clearly marked as not for retail; and
• the manufacturer takes steps to ensure that the product is not directed to retail investors, including setting an appropriate distribution strategy.

Key dates

On 8 December 2025, the FCA published its final CCI rules in Policy Statement PS25/20.

The optional transition period begins on 6 April 2026, when the relevant parts of the legislation come into force, from which date manufacturers can either:

• produce a product summary and other disclosures under the new CCI regime; or
• continue to follow the current disclosure requirements until the end of the transitional period.

The longstop commencement date for the full regime is 8 June 2027, when the transitional period ends, after which firms cannot use the UK PRIIPs KID or UCITS KIID, and must follow the CCI regime.

Next steps

Although firms can start to produce disclosures under the new rules from 6 April 2026, firms may well wish to use the transitional period to ensure they are fully prepared for the new regime. We set out some suggested next steps for impacted firms. 

• Step 1: review and identify any products that may be classified as CCIs and hence within scope of the new rules. Determine if any such products are non-retail and if appropriate make sure the non- retail availability is clear.
• Step 2: determine who is a manufacturer or a distributor of CCIs under the new rules, noting that the definition of a manufacturer is wide and co-manufacturers should have written agreements setting out each party's role and assigning responsibilities with regards to a product.
• Step 3: for a manufacturer of a CCI, review and prepare disclosures in compliance with the new disclosure requirements for retail investors in the UK, taking into account the specific content requirements set by the FCA.
• Step 4: for UK firms, consider Consumer Duty obligations and embed Consumer Duty considerations into the design and delivery of the new disclosures to investors.
• Step 5: for overseas/unauthorised firms consider the UK financial promotions regime and plan accordingly, which may mean, absent any other available exemption, having a UK authorised entity (with the s21 gateway permission) approve financial promotions on their behalf.

Comparison of impact for UK firms managing retail funds and overseas firms marketing UCITS to UK retail investors under OFR

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, February 2026