FCA BS - Product Governance and Disclosure Requirements

Question 1

Product Governance - Manufacturers and Distributors

Answer 1

The creating and management of products through their life

Manufacturer - develops or issues investments, including when advising corporate issuers on launch of new investments

Distributor - investment firm that offers, recommends, sells investment products or provides investment services

Question 2

Packaged Retail and Insurance-based Investment Products (PRIIPs)

Answer 2

Covers investments where the amount repayable to the retail investors is subject to fluctuations:

• Due to exposure to reference values
• Or the performance of assets not directly purchased by retail investor

PRIIP Regulation only applies where a PRIIP is being sold to a retail investor

Question 3

PRIIP and KID

Answer 3

• Manufacturer must prepare a KID for each PRIIP they produce and publish to website
• where retail investor initiates transaction by distance communication, KID may be provided after conclusion of transaction if it is not possible to provide before and client consents

(retail client must be told that it is not possible and that they can delay the transaction in order to receive the KID)

Question 4

Key Information Document (KID)

Answer 4

• stand-alone, standardised document for each investment

- max 3 sides of A4, but may refer to other documents such as a prospectus

Question 5

Key Investor Information Document (KIID)

Answer 5

Aimed at retail investors, therefore nontechnical language

Can be updated as frequently as UCITS wishes, but at least annually and within 35 business days of each calendar year end

Question 6

Cancellation Rights

Answer 6

A retail client can cancel a packaged products within 14 days

Life and pension policies can be cancelled within 30 days

Question 7

Records of Cancellations

Answer 7

Indefinitely for pension transfer, opt out and FSAVC

5 years for life policy and any other pension

3 years for other cases