The Financial Conduct Authority (FCA) has announced a package of measures aimed at establishing a greater “investment culture” among UK consumers.
In the government’s efforts to improve the UK public markets, it has noted that there is a significantly smaller investment culture in Britain than in the US, which it believes limits the availability of capital to firms choosing to list in London.
The FCA has been tasked with helping build a stronger investment culture and to that end has announced plans to make it easier for consumers to understand investments.
In retail investment disclosures, the FCA will shift away from complex templates that it feels “consumers don’t find useful”.
The watchdog also aims to set a clearer boundary between retail and professional investors, the idea being that if firms have greater confidence in dealing with professionals, it will free them up to innovate and offer a “more diverse range of products to truly experienced clients with the resources to bear more the risks”.
The FCA is also seeking views on how regulation can keep up with the evolving retail investment landscape and give consumers confidence to adopt a higher risk appetite.
“Today’s measures support investment risk culture right along the spectrum,” said Simon Walls, executive director of markets at the FCA.
“They ensure that firms can compete to give retail customers material that informs and engages them. They also draw a brighter line for professional markets, defined by contracting parties, informed consent, and regulation that is proportionate to that.”
