Product design Put in place systems to manage by the FCA. This binding. However, the risks posed by financial includes investment non-compliance Identify the target market, namely which types of customers the product promotions and act with due products, insurance may indicate that or service is likely to be suitable/non-suitable for. skill and care when passing on products and credit/ the firm is in Stress-test the product or services to identify how it might preform in a information provided by the hire-purchase breach of one of range of market environments and how the customer could be affected. provider. contracts. the principles in Have in place systems and controls to manage adequately the risks the FCA Assess whether customers are posed by product or service design. Handbook. If a likely to understand information principle has been Providing information to distributors provided by the provider and breached, the firm whether any supplementary Ensure information provided to distributors is sufficient, appropriate and is liable to information may be necessary. comprehensible in substance and form, including whether it will enable disciplinary distributors to understand it enough to give suitable advice and to Consider whether the nature of sanction by the extract any relevant information and give it to the end consumer. the products or services offered FCA. Breaching a by the provider and whether Providing information to customers principle does not they fit with their customers’ give rise to Have regard to its target market, including its level of financial capacity, needs and risk appetites. actions for when providing information to customers. Consider what impact the damages by a Take into account what information the customer needs to understand selection of provider could have private person. the product or service, its purpose and the risks, and communicate on the customer. information in a way that is clear, fair and not misleading. Selecting distribution channels Decide whether this is a product where it would be wise for customers to seek advice. Review whether how the product is being distributed in practice corresponds to what was originally planned or envisaged given the target market and make any necessary changes (including potentially ceasing to use a particular distribution channel). Post-sale responsibility Periodically review products whose performance may vary materially to check whether the product is continuing to meet the general needs of the target audience and take any necessary action. Country Manufacturer Obligations Distributor Obligations Range of products Penalties
Product design Identify the target market, namely which types of customers the product or service is likely to be suitable/non-suitable for. Stress-test the product or services to identify how it might preform in a range of market environments and how the customer could be affected. Have in place systems and controls to manage adequately the risks posed by product or service design. Providing information to distributors Ensure information provided to distributors is sufficient, appropriate and comprehensible in substance and form, including whether it will enable distributors to understand it enough to give suitable advice and to extract any relevant information and give it to the end consumer. Providing information to customers Have regard to its target market, including its level of financial capacity, when providing information to customers. Take into account what information the customer needs to understand the product or service, its purpose and the risks, and communicate information in a way that is clear, fair and not misleading. Selecting distribution channels Decide whether this is a product where it would be wise for customers to seek advice. Review whether how the product is being distributed in practice corresponds to what was originally planned or envisaged given the target market and make any necessary changes (including potentially ceasing to use a particular distribution channel). Post-sale responsibility Periodically review products whose performance may vary materially to check whether the product is continuing to meet the general needs of the target audience and take any necessary action. Put in place systems to manage the risks posed by financial promotions and act with due skill and care when passing on information provided by the provider. Assess whether customers are likely to understand information provided by the provider and whether any supplementary information may be necessary. Consider whether the nature of the products or services offered by the provider and whether they fit with their customers’ needs and risk appetites. Consider what impact the selection of provider could have on the customer. by the FCA. This includes investment products, insurance products and credit/ hire-purchase contracts. binding. However, non-compliance may indicate that the firm is in breach of one of the principles in the FCA Handbook. If a principle has been breached, the firm is liable to disciplinary sanction by the FCA. Breaching a principle does not give rise to actions for damages by a private person. Country Manufacturer Obligations Distributor Obligations Range of products Penalties
C2016-054_Design-and-distribution-obligations.docx