The following changes are expected:

I. Format

• ‍There will no longer be a prescribed format. Companies will have the flexibility to define the design of the information, with no fixed page limit (compared to the current 3 A4 pages for PRIIPs KID). The product summary will have to include the following information: short description of the product’s investment objectives and investment policy, information about risk, past performance, and costs and charges, as well as identifying information about the product, information on who prepared the product summary and the date it was issued. In addition, information about Financial Ombudsman and Financial Service Compensation Scheme (FSCS) eligibility.
  
  The FCA will propose afterwards some Duty-aligned standards that company will have to meet when preparing the product summary to ensure investors are presented with information in a way that enables them to make timely and effective decisions.

II. Information on fees

• Performance fees and carried interest will have to be explained using narrative and examples.
  
• There will also be a change to the reduction in yield based on summary costs over a 12-month period.
• There will also be greater flexibility for companies to describe what costs mean and their impact on returns (rather than a % over 3 different holding periods).
• A separate consultation will be conducted on transaction costs methodology in early 2025. It has not been published yet.

III. Risk disclosures

• 1-10 risk measure based on product VEV currently calculated for PRIIPs (currently 1-7).
• Flexibility to modify the risk indicator according to key risks or product. characteristics
• Combined information on the risk-reward ratio.

IV. Performance information

• A graph of past performance covering a 10-year period must be provided (where available), which is coming back to the UCITS graph rules.

Once the new regulation from the FCA is published, we will update our services to reflect these changes. At this stage, we recommend waiting for the final legislation before preparing any templates. However, since the format will be up to individual firms to decide, we will need input from clients regarding their preferred layout and design.

Standardization of the document may become more challenging depending on the expectations and preferences of companies regarding the layout, as greater flexibility is allowed compared to the PRIIPS KID. Additionally, companies will be required to keep two separate documents up to date: the UK CCI and the EU PRIIPS KID/KIIDs

Should you have any additional question, don’t hesitate to come back to us.