UK and European Regulatory Update – April to June

Retail Investment Strategy

In May, the European Union (EU) Commission's announced the EU Retail Investment Strategy (RIS) simplification proposal. This included the following;

• On Value for Money (VfM) benchmarking, the Commission has moved away from its EU-set benchmark proposals towards the Parliament and Council positions.
• In an effort to reduce the regulatory burden, the Commission has proposed enhancing the delineation between information destined for retail investors versus information destined for professional investors.
• On PRIIPs KIDsⁱ, there's a proposal to delete the proposed sustainability section.
• Another update from the Commission is the proposal that disclosure requirements should be set at maximum harmonisation, thus avoiding national fragmentation, and an alignment of costs and performance disclosures across Markets in Financial Instruments Directive (MiFID), Insurance Distribution Directive (IDD) and PRIIPs.

The Polish Council Presidency confirmed RIS is on hold until its term ends on the 30^th June. In contrast the incoming Danish Council Presidency appears eager to push RIS forward and have already been looking at a second trilogue. It has been reported that the EU Parliament and many Member States still want to move the RIS ahead with a focus on simplification.

For more details on the EU Commission’s “Targeted consultation on integration of EU capital markets” you can read more HERE.

A Call for Evidence on the Retail Journey

On the 21^st May, the European Securities and Markets Authority (ESMA) published a “Call for Evidence” on the retail investor journey under MiFID II.

This request looks at the following:

• Key market trends, including the appeal of speculative products for younger investors and the influence of social media on investment decisions.
• The practical application of MiFID II requirements, including disclosures, suitability, and appropriateness assessments.
• Additional areas such as striking the balance between investor protection and enabling informed risk-taking. 

Based on the responses gathered, in quarter three of 2025 ESMA stated they will assess whether specific regulatory adjustments or clarifications are needed with regard to investor protection and retail engagement in capital markets. 

To read more about ESMA’s “Call for Evidence” you can access the documents HERE.

ESMA Liquidity Management Rule Updates

On the 15^th April, ESMA published two key pieces in the implementation of the revised AIFMDⁱⁱ and UCITSⁱⁱⁱ Directive.

The new provisions are intended to equip EU fund managers with robust tools to manage liquidity, especially during market stress. 

The aim is to facilitate the uniform implementation of the new rules on liquidity management tools across EU Member States and to help mitigating financial stability risks in non-bank financial intermediation.

Discover more details about this update you can read the Regulatory Technical Standards HERE or read the Guidelines HERE.

Sustainable Finance Disclosure Regulation

On the 2^nd May, the EU Commission began seeking feedback to review the Sustainable Finance Disclosure Regulation (SFDR) with the revision expected to take place in quarter four of 2025. The “Call for Evidence” sheds some light on the potential direction of the upcoming SFDR revision and saying that it will focus on addressing undue burdens and simplifying requirements. It is expected that this will cover the following:

• Simplifying key concepts.
• Streamlining and reducing disclosure requirements, focusing on the most essential information for investors.
• Exploring the case for categorising financial products that make sustainability-related claims. 

You can access the full details of the feedback HERE.

Additional News

In March, the Central Bank of Ireland updated their AIFMD Q&A highlighting several updates. You can read more about this in the “Fiftieth Edition” HERE. 

On the 8^th May, the EU Commission published a Call for Evidence in relation to its Savings and Investment Union strategy which aims to do the following: 

• Foster more integrated, deeper and efficient EU capital markets by removing regulatory, supervisory and operational barriers hindering key market players and infrastructures.
• Modernise and simplify the EU rules in this area.
• Reduce administrative burden. 

The details of the Call for Evidence and the Feedback is available HERE. 

In May we had the honour of attending the Irish Funds Annual Conference in Dublin. It was a pleasure to be part of such vibrant discussions about the future of the European funds industry. 

The conference agenda showcased the remarkable progress, innovation, and pressing challenges facing fund companies in today’s environment: 

• Leadership & Regulation: Representatives from Irish Funds and the Central Bank alongside industry leaders reinforced the vital need for effective governance, regulatory clarity, and resilient operational frameworks throughout our sector.
• Private Assets & ETFs: Mainstreaming private assets and driving ETF innovation highlighted the growing demand for diverse investment solutions supported by robust, scalable technology platforms and data-driven decision-making.
• Technological Transformation: Across the agenda, it was clear that leveraging new technology and automation is essential for operational efficiency, meeting client expectations, and driving sustainable growth.
• ESG & Geopolitical Shifts: In-depth discussions on ESG and evolving global dynamics reminded us of the importance of adaptability and comprehensive risk management across all aspects of fund operations. 

We will also be present at the 12^th Annual Irish Funds UK Symposium in November, discover more details about this event HERE

Consumer Composite Investments

On the 16^th April, the Financial Conduct Authority (FCA) published their anticipated second consultation on further proposals to support the new regime for Consumer Composite Investments (CCIs). The FCA are proposing some key changes that aim to simplify the cost disclosure process for firms and manufacturers:

• Removal of Implicit Transaction Cost Calculations (also known as slippage costs).
• Confirmation that Explicit Transaction Costs be disclosed in the Cost Summary Section.
• Manufacturers can transition to producing a ‘Product Summary’ during the applicable transition period “as soon as they are ready.” 

With the consultation closing for feedback on the 28^th May the FCA plans to issue a Policy Statement with final rules in the later half of 2025 

For more information about the consultation you can read more HERE.

Sustainability Disclosure Requirements

The FCA has also 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.

More on this update is available HERE.

Simplify financial and regulatory reporting with Broadridge Fund Communication Solutions

We hope that these updates have been helpful. We aim to simplify the challenges of the investment industry by delivering client-centric services and products that address the ever-changing requirements of financial regulation.

Discover how we address ever-changing regulatory requirements for EU and UK framework for financial services compliance HERE.

Key Terms

1. Packaged Retail Investment and Insurance Products Key Investor Information Document
2. Alternative Investment Fund Managers Directive
3. Undertaking for Collective Investment in Transferable Securities