Regulatory Frequently AskedQuestions86

Both new and existing products will have the option to follow the outgoing regime or switch to the incoming CCI rules during the transition period.

For a new consumer composite investment, transaction cost estimates must be assessed for reasonableness by comparing them with the transaction costs of consumer composite investments that have a similar structure, investment strategy, and underlying assets.

The product summary must be provided to distributors free of charge and must be made accessible on the manufacturer’s website, alongside a non-machine-readable version. In addition, the manufacturer must publish clear instructions explaining how the machine-readable file should be used.

The ongoing costs of any investee closed-ended investment fund do not need to be aggregated into the ongoing costs figure of the investor fund, but they must still be disclosed separately in the product summary.

Where past performance exists, it must be presented in a line graph assuming reinvestment of any dividends. The graph must show either (i) 10 years of performance ending on a date no earlier than 60 days before the production of the product summary, or (ii) the entire period since the CCI was manufactured, where this is shorter, again ending no earlier than 60 days before the production of the summary. Where no past performance is available, the risk and return section must instead include a narrative explanation of the key drivers of performance.

Costs are calculated in two distinct ways.

First, the reduction in yield is determined; this represents the difference between the gross and net return of the moderate scenario.

Second, when calculating total costs, it’s recommended to use a methodology based on the proportion of the Net Asset Value (NAV). This means that for each annual return under the moderate scenario, every individual cost component is calculated proportionally to the NAV. Entry fees are applied at the start of the investment period, and exit fees at the end.

The manufacturer must review the core information disclosures on a regular basis and at least once every 12 months. The disclosures and the product summary must be revised or updated as necessary to ensure they remain accurate, up to date, and compliant with applicable requirements.

Where material changes are made, the manufacturer must provide each distributor with a reasonable summary of those changes. If no revisions or updates are required following the review, the manufacturer must communicate this fact to the distributors.

The volatility of the consumer composite investment must be calculated and rescaled to an annual basis using the standard volatility formula.

The risk and return score for the consumer composite investment must be presented clearly and prominently in the product summary on a horizontal linear scale ranging from 1 to 10, in the manner prescribed by the FCA.

The manufacturer is responsible for calculating costs and charges. These must be calculated over the preceding 12-month period, or over the life of the product where this is shorter than 12 months, using the assumed investment amount. Costs and charges must always be presented in GBP; where the product is denominated in a foreign currency, the exchange rate used must be disclosed.

The CCI regime has an 18-month transition period starting on 8 December 2025, allows early adoption from 6 April 2026, and becomes fully mandatory on 8 June 2027.

The SRI combines: Market Risk Measure (MRM); based on Var-Equivalent-Volatility (VEV) using historical return data, and Credit Risk Measure (CRM); probability of issuer default. Both drive the actual SRI.