The FCA has published details of temporary measures which will give investment companies a chance to improve cost disclosure.

The regulator says the changes will give investment companies a greater ability to explain their costs and charges to, “help consumers make better informed investment decisions.”

The watchdog said the change was being made to address concerns that the current disclosure obligations for investment companies were producing unhelpful cost information for consumers.    

Investment companies will now be allowed to provide a “factual breakdown” of the component parts of their costs. 

The FCA says this will enable funds to provide “additional context” where they are concerned that the 'aggregate' figures currently required by legislation do not accurately reflect ongoing costs.  

The regulator says the change is not intended as a long-term solution but it is a step towards eventual wider reform.   

Investment companies, and funds that invest in investment companies, can now consider how they reflect this additional information in their wider disclosure documents. The FCA also expects firms to consider their obligations under the Consumer Duty, it said.

According to the FCA, the move supports its objectives under the Consumer Duty, that consumers receive the information they need, at the right time, and presented in a way that they understand. 

The regulator is also working towards wider changes to the cost-disclosure regime, subject to legislative change, including the scrapping of PRIIPs Regulations.  

In a recent Policy Statement, the Treasury committed to repeal relevant MiFID cost and charges provisions post Brexit. This will herald a new “comprehensive and cohesive cost disclosure framework,” the FCA said.

The FCA says it will continue to work closely with the Treasury to ensure the Future Disclosure Framework improves market transparency, competition, and consumer protection.