FCA Handbook - FCA Handbook

1 Product Interventionand ProductGovernanceSourcebook (PROD)PROD ContentsProduct Intervention and Product GovernanceSourcebook (PROD)PROD 1 Product Intervention and Product Governance Sourcebook (PROD) and of PROD of PROD of PROD of PROD of PROD of PROD 7 PROD 2 Statement of policy with respect to the making of temporaryproduct intervention rule making and product intervention made in breach of product intervention product intervention the FCA will consider when making temporary productintervention considerations for product intervention considerations for product intervention considerations for temporary product intervention for making temporary product intervention the the.

2 Publication and post-implementation review oftemporary product intervention or replacement of rulesPROD 3 Product governance: of of products and investment servicesPROD 4 Product governance: IDD and pathway of insurance of insurance expectations for manufacturers and distributors of insuranceproductsn Release 23l Oct iPROD expectations for manufacturers and distributors in relation tovalue measures of PROD and for legacy non-investment insuranceproductsPROD 5 Extended warranties sold with rent-to-own agreements: customerinformation and deferred the customer can make an informed opt-in for extended warrantiesPROD 6 Product governance: additional provisions for of pathway of pathway investmentsPROD 7 Product governance.

3 Funeral of funeral of funeral governance requirements for subsisting funeral plansTransitional provisions and SchedulesTP 1 Transitional ProvisionsTP 2 Transitional Provisions for Funeral Plan Productsn Release 23l Oct iiPROD Contentsn Release 23l Oct iiiProduct Intervention and Product Governance Sourcebook (PROD)Chapter 1 Product Intervention andProduct GovernanceSourcebook (PROD)n Release 23l Oct 1/1 PROD 1 : Product InterventionSection : Application and purposeand Product GovernanceSourcebook (PROD) Release 23l Oct 1 and purpose of PROD is to improve firms product oversight and governanceprocesses and to set out the FCA s statement of policy on making temporaryproduct intervention oversight and governance refers to the systems and controls firmshave in place to design, approve, market and manage products throughoutthe products lifecycle to ensure they meet legal and product governance should result in products that:(1) meet the needs of one or more identifiable target markets.

4 (2) are sold to clients in the target markets by appropriate distributionchannels; and(3) deliver appropriate client the contrary intention appears, a reference to Gibraltar-based firm inPROD has the same meaning as in the Gibraltar 1 : Product InterventionSection : Application of PROD 2and Product GovernanceSourcebook (PROD) Release 23l Oct 1 of PROD 2n PROD 2 sets out the FCA s approach to issuing temporary productintervention rules. It is of relevance to all 1 : Product InterventionSection : Application of PROD 3and Product GovernanceSourcebook (PROD) Release 23l Oct 1 of PROD 3 General: Who?

5 What?..n PROD 3 applies to(1) a MiFID investment firm;(2) a CRD credit institution;(3) a MiFID optional exemption firm; and(4) branches of third country investment firms; with respect to:(5) manufacturing financial instruments and structured deposits; and(6) distributing financial instruments, structured deposits and investmentservices.[Note: articles 1(3), 1(4), 16(3), 24(2) and 41(2) of MiFID]A TP firm and a Gibraltar-based firm must also comply with the provisions inn PROD and n PROD 3 in relation to a pathway investment, with respect toactivities carried on from an establishment maintained by it, or its appointedrepresentative, in the United firms manufacturing or distributing financialinstruments or structured firms which manufacture or distribute financial instruments orstructured deposits should take account of n PROD 3 as if it were guidance onthe Principles and other relevant rules and as if should appeared inn PROD 3 rules instead of must.

6 Eligible counterparty PROD does not apply to eligible counterparty business.[Note: article 30(1) of MiFID]Where?..n PROD 3 applies to a firm with respect to activities carried on from anestablishment maintained by it, or its appointed representative, in theUnited 1 : Product InterventionSection : Application of PROD 3and Product GovernanceSourcebook (PROD) Release 23l Oct 1/5(1) n PROD 3 also applies to a firm with respect to activities from anestablishment overseas with a client in the United Kingdom.(2) But n PROD 3 does not apply to those activities if the office fromwhich the activity is carried on were a separate person and theactivity:(a) would fall within the overseas persons exclusions in article 72 ofthe Regulated Activities Order; or(b) would not be regarded as being carried on in the UnitedKingdom.

7 [deleted][deleted][deleted][deleted][del eted] PERG 13 contains general guidance on the persons and businesses to whichthe UK provisions which implemented MiFID apply.[deleted][deleted][deleted]Interac tion of PROD 3 and the RPPD firm to which n PROD 3 applies need not apply the guidance in RPPD formatters covered by PROD if the firm has complied with n PROD pathway firm that is within the scope of n PROD 3 (Product governance: MiFID)when it manufactures pathway investments other than in connection with itsoperating of a retail client s personal pension scheme or stakeholder pensionscheme, is also subject to n PROD 6 (Product governance: additional provisionsfor pathway investments) as guidance with respect to that manufacturingactivity (see n PROD (3)).

8 PROD 1 : Product InterventionSection : Application of PROD 4and Product GovernanceSourcebook (PROD) Release 23l Oct 1 of PROD 4n PROD 4 applies to:(1) an insurance intermediary; and(2) an insurer,with respect to:(3) manufacturing insurance products;product governance and distribution arrangements for legacy non-investment insurance products (see n PROD ); and(4) distributing insurance products.[Note: articles 1(2) and 25 of the IDD]A TP firm and a Gibraltar-based firm must also comply with the provisions in:(1) n PROD and n PROD (Additional expectations for manufacturersand distributors in relation to value measures data);(2) n PROD andn PROD 4 in relation to a pathway investment.

9 N PROD , n PROD 4 and (where applicable) n PROD TP 1 in relation tonon-investment insurance products (including legacy non-investmentinsurance products) that are, or will be, marketed or distributed, orthere are policies under the product that remain in force, in theUnited PROD (Additional expectations for manufacturers and distributors inrelation to value measures data) applies regardless of when the product wasfirst PROD an insurance product may be read as being a reference to theproduct for distribution to customers generally and is not intended to referto each individual contract of insurance being sold or underwritten (unlessthe context indicates otherwise).

10 N PROD 4 does not apply in relation to an insurance product that is:(1) a contract of large risks, or(2) a reinsurance contract.[Note: article 25(4) of the IDD]PROD 1 : Product InterventionSection : Application of PROD 4and Product GovernanceSourcebook (PROD) Release 23l Oct 1/7 Manufacturing and distributing pathway firm that is within the scope of n PROD 4 (Product governance: IDD) whenmanufactures pathway investments other than in connection with itsoperating of a retail client s personal pension scheme or stakeholder pensionscheme, is also subject to n PROD 6 (Product governance: additional provisionsfor pathway investments) as guidance with respect to that manufacturingactivity (see n PROD (2)).