(1) 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.
(2) An example of the type of financial instrument that would ordinarily be regarded as simple for the purposes of (1) is a plain vanilla listed bond issued by an ESCC issuer or ESCC subsidiary. This is because its features, including the expected rate of return and any risk relating to that return, are capable of being well understood by consumers in the mass retail market. A plain vanilla listed bond issued by an ESCC issuer or ESCC subsidiary is therefore likely to be compatible with the needs and characteristics of consumers in the mass retail market and therefore appropriate for distribution by way of a wide range of channels.
