Retail investment strategy: The bold plan to put retail investors first

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Retail investors constitute an important part of the EU market and have great investment potential. According to EU statistics, retail participation in capital markets is still modest, with only about 30% of retail savings being placed in equity and investment fund shares.

On May 24, 2023, the European Commission unveiled the proposal for a Retail Investment Strategy (“RIS”), part of the European Commission retail investment strategy to strengthen retail participation in capital markets, an umbrella directive modifying multiple aspects of existing legislation. The key aim is to foster an environment conducive to increased participation of retail investors in capital markets in Europe.

RIS proposed significant changes to the Packaged Retail and Insurance-Based Investment Products (“PRIIPs”) Regulation and includes an Omnibus Directive that will amend the Markets in Financial Instruments Directive II, Insurance Distribution Directive, Undertakings for Collective Investment in Transferable Securities (“UCITS”) V Directive and Alternative Investment Fund Managers Directive (“AIFMD”).

Summary of proposed changes to EU PRIIP documents:

A new ‘Product at a glance’ section to provide a highly visible summary of costs and risks at the top of the document.
Proposed inclusion of Sustainable Finance Disclosure Regulation disclosures in new section titled ‘How environmentally sustainable is this product?’
Four-page Key Information Document (”KID”) document
Removal of the comprehension alert (You are about to purchase a product that is not simple and may be difficult to understand’) at the start of the KID
Digital and machine-readable KIDs allow investors to click on sections to expand them for more detail, reducing visual overload
Tailored KID to produce “real-time” tailored versions of the document depending on the amount invested and investment horizon
Transmission of product data by manufacturers and distributors to competent national authorities
The European Securities and Markets Authority (“ESMA”) and European Insurance and Occupational Pensions Authority (“EIOPA”) will develop an online comparison tool for PRIIPs to further aid investors

Other impacts of the RIS – UCITS and AIFMD amendments

The RIS aims to improve value for money for investors in ways that will affect UCITS Management Companies (“ManCos”) and Alternative Investment Fund Managers (“AIFMs”).

Effective pricing processes: UCITS ManCos and AIFMs are required to maintain, operate, and review an effective pricing process that can accurately identify and measure all costs borne by the investment fund or its unitholders
Introducing clarity on annual statements for cost and investment performance
Cost and performance: ESMA will develop and make publicly available benchmarks to enable comparative assessment of costs and performance
Benchmarks shall display a range of costs and performances from funds that present similar levels of performance, risk, strategy, objectives, or other characteristics, and will be updated on a regular basis. If there is a deviation from the relevant benchmark, it must not be marketed to retail investors by the investment fund manager, unless it is justified by additional tests

What are the changes to the Retail Investor documentation in the UK?

As part of the UK Financial Conduct Authority’s ("FCA") Consumer Composite Investments (“CCI”) reform package, the PRIIPs KID and UCITS KIID will both be replaced with a more user-friendly ‘Product Summary’ document. Open-ended funds such as PRIIPs, UCITS, NURS, non-PRIIP packaged funds and closed-ended funds such as Investment Companies are in scope for this reform

The FCA published its final rules on December 8, 2025- including the details of the Product Summary’s contents. The new regime applies from April 6, 2026, from which point manufacturers can either use the new CCI Product Summaries or retain their current (i.e. UK PRIIPS/UCITS) disclosures. The use of CCI-compliant Product Summaries becomes mandatory from June 8, 2027.

Proposed amendments to UK PRIIP and UCITS KIID documents:

Flexible product disclosure framework, with no template
Calculation and presentation of “costs over time” and the reduction in yield metrics removed
Summary cost illustration to be provided over a single holding period. Costs to be presented in GBP
Performance fees should show an illustrative example
Implicit transaction costs will no longer be disclosed
New 1-10 risk scale to replace the PRIIPs Summary Risk Indicator.
Certain product types would be assigned a minimum risk and return score of 9
10 years of historical data requirement for volatility calculations
Introduction of past performance graphs with monthly data points. For exchange traded funds/companies NAV per share and traded price per share must be presented
Digital distribution with product information available in machine-readable format
Additional information not accounted for in the rules, i.e. Sustainability Disclosure Requirements

Apex Risk Technologies can help

We offer a vast range of services to help you with regulatory and compliance needs, including an exhaustive risk, compliance, and regulatory reporting solution. Get in touch for further information on:

EU PRIIPS production and upcoming enhancements to tailored digital documents
UCITS KIID production and navigating transition to UK ‘Product Summary’ document
Transaction costs reporting and sourcing arrival prices
European PRIIPs Template and European MiFID Template (“EMT”) production, as well as upcoming version EMT v4.3
Monthly fact sheets and other performance reporting