The FCA has reassessed which products will be affected by the Packaged Retail and Insurance-based Investment Products (Priips) rules due next year, with investment trust savings schemes (ITSS), discretionary portfolios and Isas now excluded.
In a policy statement covering its implementation of the European rules in 2018, the regulator said that, following a consultation process, it had reevaluated which products would be designated as Priips and therefore require a key investor document (Kid) setting out details such as projected future performance.
The FCA originally stated that ITSS offerings, which allow shares or securities of investment trusts to be held in a managed account, would fall under the Priip definition. However the regulator said it had taken note of a number of respondents to its consultation who noted that these were "more akin to a service than a product".
"We take the view that, although securities in investment trusts acquired through an ITSS are likely to be Priips for which a Kid is required, the scheme itself will not be a Priip," the FCA said.
Tax wrappers such as Isas will also be excluded from the list, with the regulator noting that such an account was "not an investment for the purposes of the Priips definition, and does not expose the retail investor to fluctuations based on exposure to reference values or to the performance of one or more assets that they have not directly purchased".
The FCA said that discretionary portfolios and centralised investment propositions would also be excluded from its definition.
"Although investments acquired through such services will often be Priips, for which Kids will need to be provided, in general the provision of the dealing, portfolio management or custody service will not be a Priip."
The regulator also clarified its stance on VCTs, which were inaccurately dubbed a type of unregulated collective investment scheme (Ucis) in the FCA's consultation paper.
"VCTs are not Ucis. However, given their characteristics, we do consider that most venture capital investments, including VCTs, will fall within the definition of a Priip," said the paper.
While the Kid is designed to be a standardised source of information about relevant products and their characteristics, the FCA indicated that additional, personalised performance projections could be allowed for bespoke offerings - though some respondents to its consultation warned this could be confusing to clients. The regulator said it would do additional work on this front.
"Given the considerations that have been raised in relation to personalised projections, we will consult on our approach later this year," it said.