The Financial Conduct Authority (FCA) has announced plans to simplify the information supplied to investors in the UK.

Under existing rules, brought in across Europe when the UK was still in the EU, people buying investments are given standardised documents covering prescribed information.

But the UK financial watchdog says that these documents are often complex, unclear, and miss certain points.

It warned that this format can put people off investing or lead them to make less informed decisions.

According to the regulator, more than 12.6 million UK investors - 23 per cent of all adults - currently hold an investment falling within a Consumer Composite Investment (CCI).

A CCI is an investment where the returns are dependent on the performance of, or changes in, the value of indirect investments. This includes funds, structured products, insurance-based investment products, contracts for difference and other complex investments like derivatives.

The FCA has proposed a "simpler and flexible" system which is tailored to the UK, with firms given more choice about how, what and when they communicate with those buying investment products.

It said that under the proposals, new product information requirements would help consumers understand the products they are buying while giving firms flexibility to innovate.

"The way people invest has changed," said Simon Walls, interim executive director of markets at the FCA. "We want to ensure that firms can communicate with their customers in a way that gets them the information they need when they need it.

"High quality product information will give consumers the confidence to invest; increased participation in this market will not only benefit consumers but will also provide capital to drive the economy and boost growth."

The Authority is launching a consultation to explore how best to design an outcomes-focused regulation for CCI.

The new product information regime will apply to any firm that manufactures or distributes a CCI to retail investors in the UK.

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