The Consumer Composite Investments (CCI) regime is the UK's coming replacement for the European Union PRIIPs (Packaged Retail and Insurance-based Investment Products) framework. Currently, it is going through consultations and revisions (the main consultation can be found at (CP24/30: A new product information framework for Consumer Composite Investments) and is expected to be finalised in late 2025 or early 2026.

Why is the UK replacing PRIIPs?

PRIIPs and the Markets in Financial Instruments Directive II (MiFiD II) are two key cornerstones of EU regulation that both came into force in January 2018. They had been in development for many years prior to their launch. Furthermore, both had seen a twelve month delay as the industry, regulatory and complex EU approval process took effect.

PRIIPs is responsible specifically for standardised documentation to be produced for investors at the point of sale. This document includes a risk rating, performance scenarios and a narrative around product and important issuer information. MiFID II has a wider remit, including rules for best execution, platforms and exchanges as well as obligations for target market identification and suitability.

The UK’s Financial Conduct Authority (FCA) was one of the key developers of the PRIIPs rules for the 2014-2016 period when the main rules were drafted. At that time the UK was still a member of the EU and since the UK has a large and influential financial services industry and a well-resourced regulator. this was a natural state of affairs. PRIIPs was ambitious and very prescriptive and it sought to deal with funds, insurance and structured products with a single treatment. Despite this, PRIIPs attracted criticism from the start and could not successfully make it through the European parliament initially.

Once the UK had voted to leave the EU, it was perhaps inevitable that the UK treasury and regulator would take the opportunity to replace this regulation. This did not happen immediately as there were much more pressing matters to deal with. Meanwhile, the FCA was moving forward with its landmark Consumer Duty (CD) regulation which took effect in July 2023. This principles based rule book sought to redefine the way financial firms must deal with investors, with an overall aim to deliver good outcomes for retail clients. This laudable intent is further broken down into “cross-cutting rules” acting in good faith, avoiding foreseeable harm and enabling and supporting customers to achieve their objectives.

Over two years on, this regulation is still being refined and its impact understood by both the industry and regulators alike as would be expected for such a game changing initiative. Consumer Duty has had a slight change of direction under the Labour government in the last year which has striven to simplify burdens on business and stimulate growth.

Key Features of the CCI proposal

CCI will cover investments where returns depend on performance of indirect investments - including funds, structured products, insurance-based investment products, contracts for difference and other complex investments like derivatives. Therefore, its scope is almost identical to PRIIPs.

The CCI framework aims to replace complex, standardised EU-prescribed Key Information Documents (KID) with a simpler, more flexible system tailored to UK markets, giving firms more choice about how, what and when they communicate. The FCA has always taken a principles based rather than prescriptive approach and has opted to define simpler and more flexible approaches that prioritise good consumer outcomes.

The CCI proposal will still have detailed rules around risk calculations and charges because the FCA wants to ensure as level a playing field as possible. To that extent it is aligned with what PRIIPs wanted to achieve. The risk methodologies are broadly similar, but the consultation proposals suggest replacing the 1-7 risk scale under PRIIPs/Undertakings for Collective Investment in Transferrable Securities (UCITS) with a 1-10 scale based on standard deviation of returns over five-year history. This gives further granularity for risk calculations and a more natural numerical scale, but with the disadvantage that such risk numbers clearly will not align with PRIIPs and UCITS because of the upper end of the scale being higher.

CCI does not require different performance scenarios to be shown for each product as the FCA had already removed in the transitional UK version of PRIIPs. It is fair to say, this aspect of PRIIPs (the displaying of favourable, moderate, unfavourable and stress scenarios) is one that had the most criticism because of its complexity and the unintuitive results that some products produced.

Product Summaries must disclose one-off entry/exit costs, ongoing costs and transactional costs such as percentage figures, alongside an aggregated summary called the "summary costs illustration". Performance fees and carried interests must be explained in easily understandable language with worked examples showing the potential impact on investors.

Once in force, there will be an 18-month transition period during which firms may choose to comply with either the old PRIIPs rules or new CCI rules. This long transition period is designed to help the industry prepare for significant further systems development and cost. However, this also creates a situation where firms in the same sector may be using the two very different reporting methods for a number of months making it more difficult for consumers to choose between such investments. It might have been more prudent for the FCA to suggest a date for adoption some months in to the future with a much shorter window or none at all to effect the change.

How CCI aligns with Consumer Duty

The CCI regime is fundamentally designed around and aligned with Consumer Duty principles, creating a hybrid approach. Under CCI firms must comply with specific content requirements alongside their broader obligations under the Consumer Duty, with the regulatory rationale being to provide targeted rules to facilitate standardisation and comparability.

CCI aims for a hybrid approach where specific core information and key metrics will be determined by prescriptive rules, but the overall design and delivery of disclosures will be guided by the Consumer Duty.

The FCA sets out key principles for the CCI regime including: flexible, proportionate, and technology neutral to encourage innovation; outcomes-focused and designed around the Consumer Duty so firms can focus on delivering good outcomes instead of prescriptive rules; and enabling consumers to get the right information at the right time.

The intention is that CCI will embrace the approach of the Consumer Duty, seeking good outcomes for consumers and trying to ensure that the product summary document will be meaningful and user-friendly for retail investors.