Disclosure documents
Product disclosure and key features documents (KFDs)
The key features document (KFD) is at the core of our product disclosure regime. Our research shows that well written and well-designed KFDs are an effective way of informing consumers about the main features and risks of a packaged product. However, our research also suggests that many KFDs are not of the required quality - even though providing clear information is essential to delivering fair outcomes for consumers.
In September 2007 we published a report highlighting good and poor practice in KFDs, making clear our expectation for improvement and linking this to the December 2008 TCF deadline.
Good and poor practices in Key Features Documents [PDF] is a useful reference point for firms in reviewing their point of sale material.
Information about a firm and its services
The new COBS regime introduced a principles-based approach to disclosure, giving investment advisers flexibility over how they give information to consumers on their services and costs.
We have built on COBS by introducing the new Services and Costs Disclosure Document (SCDD) on 6 August 2008. It combines key information about a firm's services and costs in a single document, and provides firms with greater flexibility to explain the cost of their services in their own words. As guidance, it will be one way for firms to meet COBS disclosure requirements - firms will remain free to develop their own material in order to comply.
For firms that wish to use this document, it may further reduce the number of documents investment advisers provide at the point of sale and give firms greater flexibility in achieving clarity for consumers.
For more information, please see Policy Statement 08/7.