US taxable persons operating in the UK face a rare set of investment hurdles (and opportunities). UK retail investors are unable to access US-domiciled ETFs from their UK brokers due to PRIIP rules. The new CCI regime reduces the disclosure barrier; it will not provide a magic “free pass” on US ETFs in the UK.
The transition from the UK PRIIPs Regulation (Packaged Retail and Insurance-based Investment Products), or KID, to the new UK Consumer Composite Investments (CCI) regime is one of the most impactful changes in the UK financial services landscape resulting from Brexit. From an investor standpoint, the big question is whether this new regime will open up access to U.S.-registered Exchange Traded Funds (ETFs) such as VOO (Vanguard S&P 500 ETF) or VTI ( Vanguard Total Stock Market ETF) by tearing down the “KID wall”.
Although the new CCI regime lays down the infrastructure required for platforms and managers to meet in the middle.
Why were US ETFs and US Funds “Banned” for Retail?
Before we look at how the CCI regime could unlocks access, we need to understand the two existing regulatory locks that have kept UK retail investors from US ETFs for decades.
Lock #1: Disclosure Lock (PRIIPs KID)
The European Union’s PRIIPs Regulation, adopted by the UK post-Brexit as “UK PRIIPs”, mandates that any “packaged” investment product sold to retail investors must be issued with a Key Information Document, or KID.
The issue? Any US-registered ETF is regulated by the US Securities and Exchange Commission (SEC), and no US manager will prepare a PRIIPs-style KID because they consider its prescriptive information requirements (specifically, the “forward-looking performance scenarios”) illegal under US law, exposing the issuer to significant liability.
Result? Brokers are legally prevented from selling these funds to retail clients on platforms such as Hargreaves Lansdown or AJ Bell, regardless of their investment knowledge.
Lock #2: Tax Lock (UK Reporting Status)
Irrespective of the marketing hurdles, for an offshore fund to be tax efficient for a UK resident investor, it needs UK Reporting Status from HMRC. Without this stamp, any gains are subject to Income Tax (up to 45%) rather than Capital Gains Tax (usually 20%).
Ironically, Hundreds of ETFs domiciled in the US already have UK Reporting Status with HMRC. They are tax-efficient…but they still can’t be marketed to retail due to a lack of KID.
Lock #3: Tax Lock (UK Reporting Status)
This is the “silent killer” of the US ETF dream. Unless a fund’s information is filed under the Overseas Funds Regime (“OFR”), it can’t be actively sold nor even show up on search bars of retail platforms’ search functions. The UK government has only granted “equivalence” to EEA UCITS funds as of mid-2026. No Equivalence Granted for the US-registered ETF. They are deemed an “Unregulated Collective Investment Scheme” UCIS for the purposes of the FCA. Marketing these funds to retail investors is extremely limited, regardless of CCI-compliant disclosure.
What is the New Regime: Consumer Composite Investments or CCI?
Issued in December 2024, the FCA’s CP24/30 announces the impending replacement of the overly prescriptive and “one size fits all” PRIIPs rules with a new principles-based regime more appropriate to the needs of the UK market. As of yet, there is little guidance around how firms can prepare for CCI but this should be available later in Q1 2025.
Better Regulation under CCI
Expected to replace PRIIPs’ infamous “Key Information Document”, the new Consumer Disclosure requirement is far more permissive under the proposed CCI regime.
Length/Form To Be Fit For Purpose: The three-page PRIIPs KID is replaced with investment-product risk-appropriate disclosure.
No More Outrageous “Favourable/Unfavourable” Performance Scenarios: US managers complained the legally mandated performance scenarios under PRIIPs were not only misleading but were impossible to present without sounding legally objectionable.
Opportunity for Substituted Compliance: The CCI regime permits the FCA to accept that certain “equivalents” would meet the requirement of a Consumer Disclosure. A US Prospectus, with perhaps a tiny UK supplement rider or a brochure / “factsheet” from the UK broker could meet the legal requirement for retail disclosure.
Platforms Aren’t Moving on US ETF availability: Enter Consumer Duty
Let’s say a US fund manager manages to whip up a CCI compliant summary, platforms still have a new, much higher hurdle to overcome – they have the FCA Consumer Duty to consider:
- Consumer Duty mandates platforms to be legally liable for investments made on their platforms resulting in “good consumer outcomes”.
- Example Risk: Selling someone a US listed ETF causes the retail investor to be exposed to currency risk (GBP/USD) and nasty surprise US tax withholding (W-8BEN forms etc).
- Example Liability: Why would a platform risk taking on any compliance burden offering a US domiciled product when they can just refer that consumer to something near-identical but UK-regulatory recognized?
UK Reporting Status paradox
Most US ETFs (Schwab/Vanguard for example) have UK Reporting Status with HMRC – which means they are UK tax efficient for UK residents. Being tax compliant doesn’t mean a fund is also regulatory compliant to sell to retail investors.
Retail investors were able to buy these pre-2018 without issue. In 2018 the PRIIPs KID prevented investors from buying them. The CCI regime set for 2026 was supposed to solve this. However, it has mainly served to show that the lack of OFR equivalence for the US is now the main blocker, vs the disclosure doc itself.
The switch to CCI regime is a win for sensible regulation, but very little actually changes for the average US expat retail investor in the UK. Instead of the dreaded “KID wall”, we now have an “OFR wall”. Unless the UK government decides to make a political gesture by granting US OFR equivalence (with all the attendant horse-trading over reciprocal access to UK funds on US platforms), the tickers VOO and VTI will probably remain “Professional Only” on UK platforms for some time to come. The CCI regime has set the rulebook in stone, but it hasn’t kicked the gate open.