PROD 3.1 General
[Note: ESMA has also issued
guidelines under article 16(1) of the ESMA Regulation covering: “MiFID II product governance requirements”, dated 5th February 2018.
See https://www.esma.europa.eu/sites/default/files/library/esma35-43-620_guidelines_on_mifid_ii_product_governance_requirements_0.pdf. ]Interpretation: financial instruments and structured products
1For the purposes of PROD 3, references to financial instruments include structured deposits.
Proportionate application of rules
- (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)
In complying with these requirements, a firm must take into account:
- (a)
the nature of the financial instrument or investment service; and
- (b)
the target market for the financial instrument.
- (a)
[Note: articles 9(1) and 10(1) of the MiFID Delegated Directive]
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.