On 8 November 2011, the FSA published a policy statement on product disclosure (PS11/14) as part of its work on the retail distribution review (the “RDR”). PS11/14 follows the FSA’s February 2011 consultation paper on product disclosure (CP11/3) and also sets out the FSA’s feedback on responses to its proposals to:
- change the key features illustrations (“KFIs”) that firms must give to their clients, arising from the RDR rules on adviser and consultancy charging; and
- replace monetary projections by inflationadjusted projections for personal and stakeholder pensions (both individual and group).
In the light of responses to the first issue listed above, and following discussions with trade bodies and firms, the FSA has made some changes to the rules it consulted on, outlined in Chapter 2 of PS11/14. In relation to the second issue listed above, the FSA has drawn up revised KFIs for consumer testing. It expects to report the results of the testing to the market at the same time as it consults on the changes.
The new product disclosure rules are set out in the Retail Distribution Review (Key Features Illustrations) Instrument 2011 (FSA 2011/55). These new rules will come into force on 31 December 2012, at the same time as the RDR rules. (A transitional rule is available that allows firms to take advantage, from 1 October 2012, of a rule for generic key features illustrations for groups or subgroups of employees in a group personal pension scheme.)