Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

PROD 3.1 General

[Note: ESMA has also issued guidelines: Guidelines on MiFID II product governance requirements, 05/02/2018, ESMA35-43-620]2

Interpretation: financial instruments and structured products

PROD 3.1.1 R

1For the purposes of PROD 3, references to financial instruments include structured deposits.

Proportionate application of rules

PROD 3.1.2 R
  1. (1)

    A firm must, when manufacturing financial instruments or deciding on the range of financial instruments and investment services it intends to distribute to clients, comply, in a way that is appropriate and proportionate, with the requirements set out in this chapter.

  2. (2)

    In complying with these requirements, a firm must take into account:

    1. (a)

      the nature of the financial instrument or investment service; and

    2. (b)

      the target market for the financial instrument.

[Note: articles 9(1) and 10(1) of the MiFID Delegated Directive]

PROD 3.1.3 G

A proportionate application of the requirements in this chapter may mean that complying with the rules could be relatively simple for simple financial instruments distributed on an execution-only transaction basis where such financial instruments would be compatible with the needs and characteristics of the mass retail market.