FSA updates proposals on product disclosure for investment products
The FSA has scrapped proposals for a full package of new disclosure material. These proposals were to include replacing the current Key Features Document (KFD) with a 'Quick Guide', setting out key product information and replacing the current Key Features Illustration (KFI) with separate projections and charges sheets. The current three-rate projection model was to be replaced with a single-rate model, with strengthened risk warnings.
Detailed cost benefit analysis undertaken by the FSA has since highlighted be significant costs in implementing proposals, particularly changes to the projections and charges documentation. Consumer testing alongside current examples of good practice has indicated that the benefits of change would be limited.
Equally, delays in the Markets in Financial Instruments Directive (MiFID) negotiations have resulted in the full impact on disclosure remaining uncertain. The FSA feels it would be
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