CP14/23: Restrictions on the retail distribution of regulatory capital instruments

Published: 29/10/2014     Last Modified: 15/01/2015

In this paper we are consulting on rules to restrict the retail distribution of contingent convertible securities (CoCos) and on requirements on the retail distribution of mutual society shares.

In August 2014 we announced the introduction of temporary product intervention rules restricting the retail distribution of CoCos. The rules entered into force on 1 October 2014. In this paper we are consulting on permanent rules to replace the temporary rules when they expire on 1 October 2015. We are also consulting on new requirements that would apply when mutual society shares are sold to ordinary retail investors.

CP14/23 Restrictions on the retail distribution of regulatory capital instruments

Who does this consultation affect?

The paper will be relevant to:

  • consumers and consumer organisations
  • firms that have issued or are considering the issue of CoCos or mutual society share instruments, in particular CCDS
  • firms involved with promotion, advice, sales or other transactions relating to these instruments
  • firms involved with the management, operation or distribution of securities issued by unregulated collective investment schemes, qualified investor schemes or special purpose vehicles investing wholly or predominantly in CoCos
  • trade bodies representing these firms
  • compliance consultants and other firms that assist distributors

Next steps

Send us your comments by 29 January 2015 using the online response form, or write to us at the address on page 2 of the paper.

We intend to publish our rules in the summer 2015. We aim to have permanent rules in place by 1 October 2015 when the temporary product intervention rules for CoCos expire.

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