✔ Firms manufacturing financial instruments must ensure their
product does not adversely affect end clients or lead to issues
with market integrity.
✔ Staff manufacturing financial instruments should have
sufficient experience to assess and evaluate the likely
performance of the product.
✔ Management should commission compliance reports on
financial products with information on the distribution
✔ Specific target markets for each financial instrument must be
identified before marketing begins. This report should detail
client groups for which the product is unsuitable.
✔ New financial products should be ‘stress tested’ for poor
outcomes in different market scenarios.
✔ Products should be able to perform even if the product
manufacturer experiences financial difficulties.
✔ Products should be tested for their sustainability if they
become commercially unviable.
✔ Products should be tested against a higher-than-anticipated
✔ Products should have a charging structure which is appropriate
to the target market.
✔ Charges for products should not impede return expectations.
✔ Charging structures of products should be completely
✔ Information on how products are distributed should be made
✔ Firms are required to conduct a review of the financial
instruments they manufacture on a regular basis, with an
additional review of individual products before any re-issue or
✔ Clients have to give express permission
to enter into securities financing
transactions with their own financial
instruments in writing with a
✔ Client financial instruments can only be
used as specified in the signed
✔ Fund firms must monitor the success
rates and accuracy of declared