Bloomberg Professional Services
The Global Regulatory Brief provides monthly insights on the latest risk and regulatory developments. This brief was written by Bloomberg’s Regulatory Affairs Specialists.
Risk, capital and financial stability regulatory developments
Recent periods of financial stress and the proliferation of risks across the financial system are fueling the development of regulatory initiatives to strengthen requirements and promote international best practice. The following policy developments represent a sample of wider regulatory and policy coverage available to Bloomberg Terminal customers. Run REGS <GO> to find out more or contact your Bloomberg representative to learn more:
- UK: FCA proposes further changes to UK retail investor disclosure framework
- Taiwan: Regulatory framework for Digital Insurers in Taiwan
- US: SEC Chair sets out plans to improve retail investor access to private funds
FCA proposes further changes to UK retail investor disclosure framework
The Financial Conduct Authority (FCA) has published further proposed changes to the UK’s retail investment disclosure regime under a new framework known as the Consumer Composite Investments (CCIs).
Context: The FCA has already consulted on certain aspects of the CCI regime as it looks to replace the current PRIIPs and UCITS regimes with a more tailored, UK-specific disclosure model. This second consultation covers draft transitional provisions and amendments to the transaction costs methodology.
Key Changes: The proposals set out specific details on several components of the CCI framework, including:
- Alignment with MiFID Org Regulation: Updates to cost disclosure requirements to ensure consistency across regimes.
- Revised Transaction Cost Calculations: Removal of ‘implicit’ costs from the methodology, with a focus on retaining only ‘explicit’ costs to reduce complexity and improve clarity.
- Transitional Arrangements: Rules to support firms transitioning from existing requirements to the new CCI regime.
- Handbook Amendments: Consequential updates across relevant areas of the FCA Handbook to reflect the introduction of the CCI framework.
- Complaints Handling: Basic requirements introduced for certain unauthorised CCI manufacturers to ensure consumer protections remain in place.
Transaction costs in focus: The FCA proposes to retain transaction cost disclosures but simplify their calculation by:
- Removing implicit transaction costs, which are complex and often misunderstood,
- Focusing solely on explicit costs, which are more transparent and easier for consumers to understand.
Looking ahead: The FCA is consulting on these changes until 28 May 2025 and a Policy Statement consolidating this and earlier consultations is expected in late-2025.
Regulatory framework for Digital Insurers in Taiwan
Taiwan’s Financial Supervisory Commission (FSC) has proposed new rules to lower entry barriers and encourage innovation in the digital insurance industry. Key changes include reduced capital requirements and a broader approach to business models.
In more detail: FSC aims to accelerate the digital insurance industry’s growth with proposed amendments to seven key insurance regulations.
- The changes are designed to attract a more diverse range of market participants, including foreign insurers.
- The term “pure internet insurance company” will be replaced by “digital insurer,” allowing for more flexible business models.
- Capital requirements will be reduced to TWD 500 million for non-life insurers and TWD 1 billion for life insurers.
- The minimum shareholding requirement for shareholders to report their source of funds will be reduced from 15% to 10%, and the existing requirement that founding shareholders must include financial institutions or fintech professionals will be removed.
- Additionally, digital insurers will be allowed to operate through both online and physical service locations.
What’s next: The FSC will establish regular “Supervisory Clinics” to assist with the establishment of digital insurers.
- Following public comment on the draft amendments, digital insurers developing innovative products will receive temporary exclusivity to encourage innovation.
- Foreign insurers will have new provisions to establish digital branches in Taiwan, with specific qualifications and documentation required.
- The draft amendments are open for public comment for 60 days.
SEC Chair sets out plans to improve retail access to private funds
The US Securities and Exchange Commission (SEC) Chair Paul Atkins set out his ambition to improve retail investor access to private funds assets through changes to the rules for closed-end funds.
In more detail: Atkins is looking to reconsider the current requirements that closed-end funds investing over 15% of their assets in private funds should impose a minimum initial investment requirement of $25,000 and restrict sales to investors that satisfy the accredited investor standard.
- In its place, Atkins is looking to achieve a ‘common sense approach’ that gives all investors the ability to gain exposure to private assets while maintaining the necessary investor protections, such as conflicts of interest, illiquidity, and fees.
- Atkins states that this initiative comes against the backdrop of significant growth in private fund assets and enhanced reporting by both private fund advisers and registered funds.
Wider context: Chairman Hill of the House Financial Services Committee has introduced a Bill to expand the definition of an accredited investor to permit more participation in private offerings.
View the additional regulatory briefs from this month:
Sign up to receive these updates in your inbox first.
How we can help
Bloomberg’s Public Policy and Regulatory team brings you insight and analysis on policy developments to help navigate the complex and fast changing global regulatory landscape. To discuss regulatory solutions, please get in touch with our specialists or read more insights from our Regulatory team.