nd I don't know if you can see it, but this is a usage kit. The first time I ever saw one in the wild, I actually got quite excited. I may have been the only one. But you see, for months we've been doing the work of implementing USIS 4, the regime which introduced the kid. And I've been a trainee, then a junior lawyer, working on these documents. And often we were pulling them together manually for clients because the bulk automated service providers hadn't really hit the scene yet. We agonised over the rules and the template and the charts and the plain language and the white space. And then suddenly the documents were in the wild. And so here I was months after all the late nights. I had an opportunity to invest my own money in a fund. I got a chance to read the kid. Being honest, I actively sought out the kid. Do you know what? Didn't want to read it. And it seems that I wasn't alone. There's a growing body of evidence to suggest that investors don't really engage with regulatory disclosure, at least in its current form. So it's time for a change. USIS kids have been in the hands of the public since the 1st of July 2011. At this stage, they are a legal and regulatory work. Their origin is in the EU, but the law that mandates them basically no longer applies to EU firms. In the EU, they've been largely replaced by the Prips kid, the kid with one eye. Prips is also assimilated into UK law, but few products use the Prips kid because most are exempted. It's messy. There's a lot that manufacturers have to squeeze into the two page USIS kid. You've got little room to add your own important statements. Once you factor in that many of the elements of disclosure are prescribed and prescribed verbatim in many cases, it is little wonder that the document starts to feel like click to accept terms and conditions. What's coming to replace the kids, both the USIS and the Prips flavors is the CCI regime. And as of Monday, the 8th of December, we've got the FCA's policy statement PS 2520, which fires the starting pistol on a huge amount of work for retail investment houses. Now, today, I'm joined by a few of the other members of our CCI working group. We've prepared some great visuals. So we're going to put those front and centre and talk to them. I'll get off camera. We'll share copies of the CCI. We'll share the slides afterwards. So there's no need to screen grab. I believe there will be a recording also. And at the end, we will pick up on how we're proposing to help clients with their project should you want that information. So first, let me set the scene a little bit further with the FCA's broad ambitions for CCI. The FCA is introducing a disclosure regime that is intended to be more straightforward and less rigid, avoiding forced comparisons between products that aren't those substitutes, as was the case under Prips, avoiding rigid templates, as was the case under the USISKID and PripsKID, and enabling more innovation in disclosure. The FCA expects the new disclosures to be engaging for investors and potentially more relevant to consumer decision making, though maybe not necessarily at the heart of the consumer journey, which was the original ambition. There are clear parallels and explicit references to the consumer duty throughout all of this. The FCA is still mandating some standardised elements of disclosure too, which will enable consumer comparisons. And it says these are limited to the essentials, but even so, they do cover some of the critical elements of the new disclosure. And may curtail that feeling of flexibility, but it's nothing that we weren't expecting based on the earlier papers. In an effort to level the playing field and to secure a consistent experience for UK retail investors, there are some areas where the new regime attaches to products that are not supervised by the FCA, such as recognised funds, overseas recognised funds, and firms outside of the regulatory perimeter. We're going to come on to that. And it must be noted that in this incredible week of policy drops, the CCI paper is part of a wider initiative. So nestled around it are papers and statements on consumer access to investments, client classification, risk warnings, all of this is relevant in this context. So hopefully with the scene set a little bit there, I'm going to hand over to Tim Fosh first to talk about the scope of the new regime. Thanks, Phil. So who does the regime apply to? How's it work? What's it look like? It's worth saying at the start, it's pretty similar to PRIPS, but with sort of a few changes. It applies to manufacturers and distributors. And what it means to manufacture for these purposes is effectively set out in the CCI regs. And is anyone who does any of the things on the list there, I won't read them out, but it also includes people who change terms, people who change terms, conditions and features. And it includes anyone who makes material contribution to the manufacturer of the CCI, even where that's in collaboration with someone else. So you can have multiple manufacturers in respect to the same product. And where you've got that, you need to have a written agreement. So even more paper for people to deal with. And then you've got sort of everyone else who's involved, which are broadly captured under the term distributors. And that's anyone who advises on offers or sells a CCI. And that sort of is fairly broad. But when you dig into the definition of what it means to offer CCIs for these purposes, it takes it even broader. Is anyone who communicates sufficient information on the CCI and its terms to enable a person to decide to buy one? So it's very, very broad. And the sort of regime is sufficiently broad that it doesn't only cover UK firms. It's targeted at where the CCI is offered to retail investors in the UK, regardless of where it's offered from. So come on to it in a little bit. But that does mean that it applies to overseas firms. When we talk about CCIs, what are we talking about? Well, consumer composite investments. What does that mean? I mean, it captures a huge range of stuff. It's open-ended funds. It's contracts for differences. It's closed-ended funds. And the FCA has made it very clear that that's the case. It's OFR-recognized schemes. It's other complex investments. It's insurance-based investment products. It's sort of all sorts of things. And it even includes structured deposits. There is a sort of set of things that it doesn't include, which is sort of set out in legislation as well. And that's pension schemes. There's pension annuities. It's insurance where the benefits are only payable on death or sickness. It's central bank shares. It's certain securities issued by banks, particularly sort of bonds. It's certain securities guaranteed by government and local authorities. The FCA has expressly clarified that US ETFs are not excluded. So they are within the regime. And that is on purpose. And importantly, closed-ended investment funds are also not excluded, as the government has themselves confirmed. And so there's another sort of element that has been excluded in that the legislation excludes those products which are expressly not for retail. And the FCA has now clarified what it means by that. And that's where, on its face, the product makes it expressly clear that it is not marketed for retail. So on its face, it's got to say, big bold letters, this is not for retail. And the manufacturer has been distributed to retail customers. And the manufacturer has then got to take active steps to ensure that that product is not distributed to retail customers. One thing that's worth noting that the policy statement has done, as compared to the consultation paper, is that the requirements for minimum investment of £50,000 has been removed. It's potentially going to make this exclusion slightly easier in practice to apply. The broader scope of the CCAI regime, I mean, we'll talk about what it means on a product. I mean, we'll talk about what it means on a product level in a minute. But it's not a product level in a minute. But it's also applying principles and the consumer duty to firms which are outside the regulatory perimeter. That's one of the features of the designated activities regime, which the CCO regime is sort of part of, is that the FCA can apply rules to those within the regulatory regime. So, you know, firms which aren't authorised to firms which aren't authorised under FSMA or otherwise. And it is imposing rules to sort of put in place high level standards for unauthorised firms. So to ensure that they've got a sort of product approval process to ensure that they've assessed the risks posed by the CCI to retail investors, and ensuring that the distribution strategy is appropriate for the retail investors that they've targeted. And it's sort of similar to a requirement to comply with sort of various of the principles. And it was originally proposed that this would apply sort of broadly to everyone within the regime. But the FCA is now clarified that these rules won't apply to OFR firms. And the FCA said that distributors will sort of need in line with those principles to ensure that customers are aware whether they will have access to the FCA's to the FCA's to the FCA's to the FCA's to the FCA's to the FCA's to the FCA's to the FCA's to the FCA's. And things like that. And now I'll hand over to Mikaela Arta, who's going to talk generally about what the disclosures are going to look like. Thanks, Tim. So now moving on to what the disclosures for CCIs will actually look like. And two documents we're going to become very familiar with over the next few months, the product summary and the core information disclosures. And this was the approach provided for in the consultation paper. So, no changes there, but there are some nuances which have changed in relation to the content and the delivery. And we'll pick these up as we go through. So, manufacturers are going to have to produce both of these documents. But as we'll see, they are interdependent and include a lot of the same information. It's really their purpose and delivery which is different. So, first, the product summary. You can think of this as the new kid. This is intended for retail investors. It should be a short, concise document which is consumer-friendly. So, no jargon. It has to be a separate document, again, like the kid. The summary should be at share class level, although there are provisions which allow for representative share class disclosure in a very similar way to the kid. And the product summary must contain core information. And we'll talk quite a bit more about what this is in a moment, but can also include anything else the manufacturer thinks will be helpful to investors. The document needs to stand on its own two feet and not rely on cross-referencing so that the investor can achieve what the FCA has referred to as a reasonable and sufficient understanding of the nature, objectives and risk of the CCI. There are, however, a few exceptions which will allow a degree of cross-referencing. But the starting point should really be that the document stands alone. As Phil said at the beginning, it's not a free-for-all. There is a level of prescription around the content of the product summary. For example, it has to be called product summary. And there are five headings in the new disk sourcebook which set out the prescribed information which needs to be included. And these are in relation to some general information, costs and charges, risk and reward, past performance, and complaints and compensation. There are not, however, not any formatting or template requirements. And the FCA is encouraging what they've called a tech-positive approach, meaning that firms can choose how to provide the information in the most appropriate way and based on the needs of consumers. It could be provided on a website with layering or dashboards. It could use images and graphics as well. And the aim is to encourage firms to be flexible and innovative in a way that is interactive and engaging. But quite a lot of care is going to be needed with thinking about the format. As I mentioned, the wording needs to be simple and jargon-free. It must be consistent with other documents. And as you might remember, people with kids have tended to ensure consistency by just copying the investment objectives and policies. It might be more difficult to do that now with the requirement for simplicity and no jargon. Firms have to have a regard to the characteristics of the retail investors to whom the CCI is likely to be distributed to. And they also need to think about the nature of the CCI itself, its risks, its complexity, fees and charges. Like the KID, the product summary needs to be reviewed regularly, but at least annually. The FCA has set out some guidance about the circumstances in which an update will be triggered. The product summary will be provided to distributors and the rules now provide that the distributor can rely on the product summary, provided that reliance is reasonable. The FCA has given guidance on what this means. So for example, it might not be reasonable to rely on the product summary if there are obvious inaccuracies on the face of the document. Distributors will also have to have an eye to the consumer duty and avoid reasonable harm to investors in distributing the product summary. And there are also requirements to flag to the manufacturer if there are concerns about the product summary during the scope of the life of that document. So all of this means I think that distributors can't just pass on the product summary without considering its content. The distributor can't now, however, produce its own product summary and has to provide the manufacturer's version. And this is obviously driven by concerns about who would be responsible if the distributor changed what had been provided by the manufacturer. And I think probably a welcome change for everyone. The requirement is that the distributor provide the product summary before sale and an enduro for medium after sale. And we'll talk a little bit more about what durable medium might look like in a little bit. But the FCA has also clarified that pre-sale distributors only need to highlight information that customers need to make a decision and not all the information in a product summary. And in practice, it will be interesting to see if distributors take any judgment out of it and simply provide the full product summary. So enough on the product summary at a general level. Just moving on to the core information disclosures. This document is simply for distributors. It must be provided in a machine-readable format and in a format that someone with no special software can read. This document essentially includes a lot of the information from the product summary. So the costs, risk-reward, performance, etc. And I won't go into all these again. But where the CCI is a fund, then there are some specific additional matters that will need to be included, such as details of the operator and whether the product is authorized or regulated. So Phil and Julian are now going to talk us through some of the detail of some of the topics covered by the product summary. Thanks, Michaela. So next we're looking at the costs and charges disclosure. Now it's fair to say that we're keeping this fairly high level and conceptual here, but hopefully it gives you a flavour of what we're being asked to look at. So we will need to disclose in the product summary one-off entry costs, the costs at the point of buying the investment, one-off exit costs, the costs at the point of redeeming the investment, ongoing costs figure, put a pin in that, the costs of running the investment, transaction costs figure, so the costs incurred as a result of buying, selling, lending, or borrowing of investment, and disclosure must be made where relevant on performance fees and carried interest. So the first four of those in our table need to be disclosed both in percentage terms and in pounds figures, so round pounds, based on an assumed investment of £10,000 or a similar magnitude of foreign currency, divisible by £1,000 and based on the preceding 12 months figures. All figures are on a gross basis. Transaction costs appear to only be required as a percentage, and they don't have to be included in the cost section and could be included next to the product strategy. A few extra points to cover then. The OCF prevails as the main representation of operational charges. The combined summary cost figure is no more. The FCA also appears to have renamed the OCF from the ongoing charges figure, as it was known in the USUTS days, to the ongoing costs figure, although they use both phrases in the policy statement, so it's unclear if it was intentional or not. Then, of course, costs and charges are different. The OCF will incorporate pull-through costs of underlying investments except for underlying closed-ended investment funds, which must be separately disclosed, and I think Sarah's going to talk about that a bit later. And only explicit transaction costs need to be included in the product summary, and that excludes bid-ask spreads, which was something that a few firms had explicitly asked for clarification about. Moving on then to risk and reward. The underlying CCI risk-reward score is based on the same calculation methodology as the USUTS-KID S-R-R-I. It uses price volatility, so that's now measured over 10 years rather than 5 years, and that means that the base calculation is effectively accounting for market risk, but not for counterparty risk, like the PRIPS-KID, and not for liquidity risk. The calculation gives you a percentage figure for annualized volatility, and that percentage then sits within a particular category on a scale of 1 to 10. The categories are not equally spaced, however. Within the USUTS-KID S-R-R-I. Within the USUTS-S-R-I. There are 7 buckets, but for CCI, there will now be 10, and the numbers may need to be amended for particular features, and they may be manually amended, including cautiously downwards, based on the manufacturer's knowledge of the product. So now we've got a rather whizzy diagram that compares the USUTS-S-R-I categories to the new CCI ones. So the SCI thinks that moving from a 1 to 7 to a 1 to 10 scale will reduce bunching in the middle reaches of a scale, particularly a feature of equity funds, and it will promote a more granular risk differentiation. As you can see here, the first four categories are the same for USUTS and CCIs, but for the higher categories, CCI has more differentiation. So what was a 7 under the USUTS regime could now be an 8, 9, or 10. So what was a 7 under the CCI? With that, over to Julian to talk about past performance. Julian Hicks, Thank you. Okay, so as you can see for the slide, there's now, as proposed in the CP, a requirement for a past performance graph. And the presentation of the graph looks very different from the current bar chart we're all familiar with under the USUTS-KID rules. This is just, believe it or not, a simplified mock-up and doesn't show the CCI's benchmark. But you can see that because it's a line graph below and cumulative, you don't get that start downward performance contrast and trend that you can see with the bar chart. There's still an exemption, though, for products that don't have past performance data, such as structured products and other fixed-term investments. And those products will be required to provide a narrative explanation of the factors that are likely to produce negative or positive performance instead. And that's a feature of how the CCI covers all of these products, not just funds, in one regime. There are some differences, despite having to introduce rules that cover all of the products. So what else has changed from CP2430? The X-axis covers 10 years, as proposed, but the labelling of it for incomplete calendar years has been clarified. The requirement to show performance, even where less than 12 months performance is available, survives, despite some criticism, though with a warning explaining that short-term performance may not necessarily be representative performance in the longer term. And interesting to see if we have more creative versions of that risk warning, or it's just trotted out exactly as I just said it. For performance of less than three months, the line graph is optional, and you provide a narrative explanation. Data points are now monthly rather than quarterly to more accurately reflect an investment's volatility. The standardised £10,000 has survived from the proposals, and there's now clarification that if the relevant currency is non-GPP, then it should be an equivalent divisible by £1,000 to make it appear less random. For products that have less than 10 years of past performance and are the result of a merger of two or more funds, the original proposal was to show the performance of each of the three merger funds. This has been dropped as too confusing. Where there's one predecessor fund for a USIS or nurse that formed a new fund, as far as I can interpret it, the rules on simulated past performance in COBS would seem to apply, as there's new guidance cross-referring to those rules. This is an important point for many managers, where you form funds, predecessor fund, as per the USIS Q&A, where you're allowed to carry across past performance. So I think definitely one to check out on. For USIS and nurse with target or constraining benchmarks and their prospectuses, the performance of those benchmarks must be included as per the CP. But in a change in the previous proposal, that of a comparator benchmark may be included. This is for consistency with the requirements for other CCIs. The comparator must be included in the prospectus, which are the same. The comparator must be included in the prospectus, which makes sense. Where objectives and strategies have changed in the last 10 years, new guidance says not only that this is noted, but that the benchmark shown must be appropriate for the relevant periods. That's at our past performance. So moving on to a little more on distribution. The original vision was that distributors would be able to make their own summary from the product information provided by the manufacturer. As Michaela said, and this has given the wide range of contrasting views and the flexibility of the product summary over liability, consistency in particular, and I don't think that was just from the lawyers, the SCA agreed that the freedom for distributors to amend the manufacturer's product summary might have created regulation. So, as we've heard, and I think it's a really important point, this means the traditional role of the two parties is carried forward to a much greater extent. However, there are some rules on items the FCA thinks distributors should highlight pre-sale to support an informed decision, being at a minimum a brief explanation of the product, ongoing cost figure of the product and other costs relevant to the product, example, for example, one-off costs, the risk and return score of the product, and a brief explanation of its risk and return profile, including any required warnings to the product. And so the SCA wants to ensure firms have freedom and regulatory certainty to explain contextualised disclosures. That's going to be quite a difficult principle to grapple with, but it has survived. The quite prescriptive requirements on distributors to report problems and inaccuracies in the product summary to other firms in the distribution chain have now been amended, though, to align more closely with the language used in the consumer duty. And the FCA is planning to consult on changes to rules on the application of requirements of the duty in the first half of 2026. This will include how firms work together in distribution chains and on the sharing of information through the chain. Durable medium. Durable medium, which Makhila mentioned. The CP proposed that investors should also receive the product summary in a durable medium at the point of sale or as soon as reasonably practicable afterwards. Distributors are still required to deliver these to customers unamended in a durable medium at the point of sale or shortly afterwards, having also made a development of the product summary. So the durable medium available available for consumers pre-sale. So the durable medium concept retains its relevant. This is a summary of the definition on the screen as recently amended in the glossary when the MIFID org regulation was integrated into the handbook. The FCA took the chance to increase the digital first assumption, though the definition was effectively unchanged for non-MIFID business. So in any event, and despite what Makhila said and the digital first assumption, I think it's difficult to see any early adoption, at least, for the product summary of anything other than a PDF. So it'd be easier to get your head around it if you're a lawyer looking at them or in compliance. I think we're going to start with those as a document. All right, on to Sarah Kopack now to look at closed-ended funds. Thanks, Julian. So yes, as we've heard, the regime will apply to closed-ended funds, including overseas closed-ended funds made available to UK retail investors. And as we've heard, there's also an opt-out for retail with a reminder of those rules on the slide. And in particular, there was a lot of unease for the investment trust sector over the previous consultations, because investment trusts have a different structure and pricing rather than open-ended funds. So the FCA has made clear in its final policy statement that it has consulted closely to try and find solutions to these issues that were raised. And overall, we think the final position is now clearer and more beneficial than the initial proposals. So there were three key issues for investment trusts. Firstly, on scope, it was argued that investment trusts should fall outside the scope of the CCI regime because of their unique characteristics. They're listed companies. They don't price up NAV. They have additional requirements already in the form of the UK listing rules. Also, under the scope, the sector felt that the independent non-executive boards of directors should not be responsible as the manufacturer of CCI. So the FCA would have to produce the product summary and that this responsibility should fall on the AFIM. And the FCA responded that the government had set the parameters and so investment trusts and closed -ended funds more broadly would need to be included in the CCI regime, so would remain in scope. However, in recognition of the additional obligations under the UK listing rules, the FCA did confirm that compliance with the listing principles would be considered compliance with the disc principles. And on the point where they were calling for the AFIM to be the sole CCI manufacturer, the FCA did note that the board and the AFIM would likely both be joint CCI manufacturers and clarified that the responsibilities may be agreed and split out. They did helpfully say that they would expect the vast majority of the responsibility to fall on the AFIM, and that this agreement should be agreed and that this agreement should be written down. Finally, on costs, which was alluded to before, it was felt that the proposals in relation to pull-through costs didn't fairly represent how the investors would be paying for such costs, given that the costs reduced the NAV, which is not directly represented by the share price for an investment trust. So this has been amended. So this has been amended in relation to the ACF, which is not directly represented by the ACF, which is not directly represented by the ACF, which is not directly represented by the ACF. So this has been amended slightly in that CCI's which invest in closed -ended funds will no longer need to pull through the fees of the underlying closed-ended fund into the OCF. However, these costs do still need to be disclosed separately and transparently within the product summary. And now there are just a few points that we thought might also be of interest. So past performance, past performance of both trading value and net asset value will now be shown in the product summary. And in terms of gearing and maintenance of real assets, this is no longer going to be required to be disclosed in the ongoing cost calculations. And finally, on timing, initially it was proposed that closed-ended funds would be front-running the regime. However, now this has been changed. And as we're about to hear from Julian, the timing is now the timing is now the same across all CCIs. Okay, so on to timing. The timeline that we'll just bring up there shows us the next 18 months. And there's a little note for our seminar in January that Phil will note again. So inevitably, it's going to be a tighter process than we might hope. Two Christmases and one summer intervene. But that takes us through to 8th of June 2027, 18 months after the policy statement. And as Sarah mentioned, really important, I think, for the closed-ended fund industry, they're under the same timing. The exemption for the exemption for UCITs, nurse and OFR funds from the need to comply with the PRIPS rules and to continue with kids as they're doing now is presumably going to be extended. Technically, that expires at the end of 2026. And so there's going to have to be an SI to extend that or else we're going to get a messy and brief move to PRIPS at the start of 2027 before the CCI regime kicks in. I'm not recommending that we start those fallback preparations. But that is an assumption behind the whole timing proposal. Firms may choose to produce product summaries from the 6th of April 2026 when the CCI rules are formally effective. So in the original consultation proposal was that firms will be able to adopt the new product summary format immediately on the publication policy statement. However, in light of the refinements of the proposed, this was felt to have been impractical. Product summaries for products which will be distributed by persons other than the product manufacturers are required to include core information in a machine-readable format. And there's no currently agreed industry standard for that. So unless such a standard is agreed pretty fast by the 6th of April, the only manufacturers will be able to adopt the new product summaries are those manufacturers who are the sole distributors of their products as they benefit from the exemptions and requirements to provide core information in a machine-readable format. So I can't see it happening very quickly before the 18 months is up for very many funds. It's also in practice going to be a commercial matter to agree with distributors for any manufacturer wanting to move early to product summaries. The market is sorted, I guess, but it could be a bit messy. Okay, so how do we spend the next 18 months on this project? There's a lot to achieve. We've grouped some of the project tasks together here for manufacturers, distributors, and all firms. This won't be complete by any means, but you can see there's definitely quite a project. The tasks are both internal and external. As well as working out how the rules apply to you in deciding on the design of your product summary if you're a manufacturer. A lot of work will be data-driven and involve your webpages. There will be engagement, as I said, with your current service providers for many of these items, as well as with distributors. They will be working out how to apply the rules for their customers and looking at their customer journey and engaging with the manufacturers and in industry discussions on data exchange formats. Then there's also more flags to come by the FCA. I mentioned consumer duty, and it seems appropriate to end with that reference and feel pretty much also started with that. So I get a hand back to him. Thanks, Julian. So we've got here a slide talking about our proposal for a new service called CCI Accelerator that we've already flagged to a number of you. We're planning to create some really practical events and resources to help get up to speed on CCI, but at a cut costs that you can share with other participating firms. Lots of interest in this already. If you want any more details, including the fixed fee, just let your usual contact know. Now, we've covered a lot of ground, and you'll have seen that this is an initiative where the FCA has genuinely, we think, considered the feedback they received during the consultation process, though it is interesting that as a result, the product summary may end up looking like a spiritual successor to the use of its kid rather than a radical rethink. Although to an extent, that really depends on what the creative departments within firms decide to do with the extra freedom they've now got outside of the prescribed elements. Now, at this point, I want to just flag a future seminar that we'll be having in London on the morning of the 29th of January. It's going to cover the absolute deluge of new regulation and policy that we've seen this week. And in case you haven't been keeping count, we do have a very silly little aid memoir coming up. Just before that, thank you very much for your attendance and attention. We look forward to continuing the conversation with you. As I said earlier, the FCA has fired the starting pistol and we are going to be able to do with the same thing. So we are ready to have conversations with clients. If that's of interest, let one of our speakers or your usual contact know. Thanks again. Take it away. And just an additional note. We're not planning to take any questions today. I'm sure people have lots of questions. Probably a little bit early to be trying to pick through those now. But obviously, if you do have any questions, do please send them on to your usual contact and we'll try and pick them up offline.