European Union Updates

Retail Investment Strategy

The first trilogue of the Retail Investment Strategy (RIS) took place on 18^th March between the European Parliament (EP), the European Commission EC and the European Council (Council). The co-legislators have tasked the EC with reviewing the RIS and proposing measures for simplification in regard to:

• Value for Money (VfM) benchmarks
• Disclosures requirements under the RIS
• Customer journey (i.e. best interest test and suitability)

The next stage involves linking the RIS discussions with the broader Savings and Investments Union (SIU) communication published on 19^th March.

For further information on this you can find the details and download the files HERE

It should be noted that there is considerable scepticism within the Council that a swift agreement will be reached. The Parliament and Council positions remain divided, and even within the Council, member states hold conflicting views. Some would like to see stricter measures, while others want the RIS considerably simplified. There is no guarantee that the Commission’s revisions will be deemed acceptable to the Council, which remains inclined to stick closely to its current position.

At this stage, we do not expect there to be further trilogues until the Commission completes its proposals to simplify the RIS.

Solvency II

The FinDatEx working group has updated the Solvency II Tripartite Template (TPT) to version 7.0. This new version is effective from 1^st April 2025.

This new version incorporates essential updates to align with recent Solvency II regulatory changes and address key industry challenges such as:

• Enhanced SCR Calculations.
• Dual NACE Codification.
• Miscellaneous corrections to enhance data accuracy and usability.

A spreadsheet of the Solvency II TPT v7.0 can be found HERE and the associated Payment-In-Kind Guidelines can be found HERE.

European ESG Template

The FinDatEx working group has updated the EET template to version 1.1.3. This new version is effective from 1^st January 2025. The key changes in this version are:

• New data fields related to ESMA's Fund Naming Guidelines and compliance with PAB and CTB have been added.
• The disclaimer and the following data fields have also been modified: 1, 29, 35, 36, 63, 65, 213, 461, 590, 591, 593, and 594.
• Last but not least, editorial corrections have been made.

A spread sheet of the EET v1.1.3 can be found HERE

Sustainable Finance Disclosure Regulation

Following the EC’s first public consultation, “The Platform on Sustainable Finance” , the EC released a briefing note suggesting how to establish and calibrate a categorisation system for sustainable finance products. The proposal emphasizes aligning the categorisation with investors’ sustainability preferences and integrating it with existing Sustainable Finance Disclosure Regulation (SFDR) elements and the broader sustainable finance framework. It also considers the impact of introducing a new categorization system on current financial products.

The Platform proposes categorising products into three sustainability strategies :

• Sustainable
• Transition
• ESG Collection

For more details on the EC briefing notes you can find the document HERE

Additional News

On 26^th February, the EU Commission unveiled new proposals aimed at streamlining reporting requirements across several EU regulations. The legislative package introduces significant amendments to:

• CSRD (Directive (EU) 2022/2464).
• CSDDD (Directive (EU) 2024/1760).
• The Taxonomy Regulation (Regulation (EU) 2020/852).

These proposals will now be forwarded to the EU Parliament and the Council for their review and potential adoption.

As expected, legal changes mostly relate to the Corporate Sustainability Reporting and Due Diligence Directives (CSRD, CSDDD) and the Taxonomy Regulation (TR). SFDR is not directly impacted at this stage.

You can access the press release for these proposals HERE.

For further details you can read the EU Commission Q&A HERE.

United Kingdom Updates

Consumer Composite Investments

The major news to take note of in the last quarter is the Financial Conduct Authority’s (FCA) announcement of the UK’s new Retail Disclosure Framework for Consumer Composite Investments (CCIs). The CCI Consultation discusses product information requirements that will replace the current UCITSⁱ and PRIIPsⁱⁱ framework.

The key changes proposed under the new regime are:

• Allow firms to design product disclosures as proportionate and relevant to the product.
• A change in risk metric from a 1-7 range to a 1-10 range.
• A Past Performance graph based on quarterly data points rather than annual data points.
• Costs to be calculated more closely to the UCITS methodology than the PRIIPs methodology. Performance fees to be described in a narrative form (previously they were required in a calculated figure).
• Core information data file to be created and distributed. This must be machine readable file(similar to an EMTⁱⁱⁱ/EPT^iv)
• More emphasis on distributor responsibilities in the investment chain.

This first consultation closed on 20^th March 2025. The FCA have released a second consultation on 16th April 2025 with feedback closing by 28^th May 2025.

The main highlights of the second consultation are:

• The requirement for calculating and disclosing implicit transaction costs to be removed, eliminating the need for the slippage methodology.
• The requirement suggests that explicit transaction costs be separately disclosed, in line with the first consultation guidelines, and included in the summary cost figure.
• Manufacturers can transition to producing a product summary during the applicable transition period.
• Finally, the FCA plan to issue a Policy Statement with final rules in late 2025 which is later than originally expected.

More details about the first consultation can be found HERE and for the second consultation you can read more about it HERE.

For more information about the Retail Disclosure Framework you can read more HERE.

Sustainability Disclosure Requirements

The FCA have indefinitely pushed back the publication of a policy statement on how its Sustainability Disclosure Requirements (SDR) will be extended to portfolio management companies.

"We want to ensure an extension of SDR to portfolio management delivers good outcomes for consumers, is practical for firms and supports growth of the sector," the Financial Conduct Authority wrote in an update on its website which can be read HERE.

Consumer Duty

The FCA has officially removed the requirement for firms to appoint a Consumer Duty board champion. In an update published on 27^th February, the regulator said that, from that date, it no longer expects firms to have a Duty champion, although “they can retain the role should they wish to do so”.

More about this can be found HERE

ⁱ Undertaking for Collective Investment in Transferable Securities

ⁱⁱ Packaged Retail Investment and Insurance Products

ⁱⁱⁱ European MiFID Template

^iv European PRIIPs Template