DISC 3 Preparing the product summary

1. (1) The manufacturer must prepare a short and concise document in English, titled ‘product summary’, setting out appropriate information about the essential characteristics of the consumer composite investment, conveying as a minimum the core information disclosures.
2. (2) The product summary must be clearly separate from other marketing materials and contain enough information within itself, without relying on cross-references to other materials, to enable retail investors to achieve at least a reasonable and sufficient understanding of the nature, investment objectives, risks and costs of the consumer composite investment
3. (3) The requirement in (2) is modified in relation to:
   1. (a) a multi-option product (see DISC 2A.4.1R), in that the product summary may rely on cross-references to the wrapper’s general summary and need not be separate from it;
   2. (b) the consumer composite investment's prospectus, in that the product summary must include a cross-reference to those parts of the prospectus where more detailed information on costs and charges can be found (see DISC 6.6.3R); and
   3. (c) the product summary for a feeder NURS or an ICVC that is a feeder NURS, in that the authorised fund manager must cross refer to documents relating to its qualifying master scheme which enable retail investors to understand the qualifying master scheme's key particulars, including:
      1. (i) its investment strategy;
      2. (ii) a description and explanation of any material differences between the risk profile of the feeder NURS and that of the qualifying master scheme; and
      3. (iii) its charges, including the aggregate of the charges of the feeder NURS and its qualifying master scheme as disclosed in the feeder NURS's most up-to-date prospectus.

1. (1) A firm must take reasonable care to ensure the product summary and any additional product communication:
   1. (a) meets the information needs of retail investors;
   2. (b) is likely to be understood by retail investors; and
   3. (c) equips retail investors to make decisions about the consumer composite investment that are effective, timely, and properly informed.
2. (2) A firm must ensure the contents of the product summary and any additional product communication are clear, fair and not misleading.

Firms who are authorised persons are reminded of the analogous requirement in PRIN 2A.5.3R, which applies to any communications with a retail customer.

The contents of the product summary must:

1. (1) reflect and be consistent with the underlying core information disclosures;
2. (2) be consistent with the terms and conditions applicable to the consumer composite investment, the contents of any offer documents and any contractual documents governing the operation of the consumer composite investment; and
3. (3) comply with any requirements in  DISC 4 about how certain core information disclosures must be presented.

1. (1) In preparing a product summary the manufacturer should have regard to the information needs and characteristics of the retail investors to whom the consumer composite investment is likely to be distributed so as to ensure compliance with DISC 3.1.2R, which applies the more general requirement in PRIN 2A.5.3 R to the person preparing the product summary.
2. (2) PRIN 2A.7.2 G is relevant to the degree of care required of a firm in complying with DISC 3.1.2R. A firm should consider the following factors in particular:
   1. (a) the nature of the consumer composite investment – in particular, the risks of the investment, its relative complexity, and its costs, fees, and charges;
   2. (b) the characteristics of the retail investors to whom the consumer composite investment is intended to be distributed or is in fact being distributed, to the extent the firm knows this information or reasonably should know it or be able to obtain it, including:
      1. (i) their financial objectives or reasonable expectations in relation to the consumer composite investment; and
      2. (ii)their resources, degree of financial capability or sophistication, or any characteristics of vulnerability; and
   3. (c) whether the firm has provided or will provide advice to the retail investor.
3. (3) Where providing a piece of information in the product summary would meet two or more requirements in DISC, for avoidance of doubt a manufacturer is not required to provide that information more than once in the product summary.

If, in preparing it, a firm takes reasonable steps to ensure the product summary or additional product communication complies with the requirement in DISC 3.1.2R(2), a contravention of that rule does not give rise to a right of action under section 138D of the Act or regulation 9 of the Consumer Composite Investments Regulations.

For each consumer composite investment that is, or will be made, available for distribution to retail investors, the manufacturer must prepare the core information disclosures in accordance with the requirements of DISC 4 (General product information), DISC 5 (Risk and return information), DISC 6 (Costs and charges information) and DISC 7 (Performance information).

In respect of each consumer composite investment it manufactures and which remains available for distribution to retail investors, the manufacturer must:

1. (1) review the core information disclosures regularly and at least once in every 12-month period; and
2. (2) revise or update the core information disclosures and the product summary as necessary to ensure that they remain up to date and compliant with applicable requirements in DISC 3 to  DISC 7, and in particular DISC 3.1.2R.

1. Following the review in DISC 3.2.2R, the manufacturer must ensure the following are provided to the distributors of the consumer composite investment:
2. (1)the revised or updated core information disclosures, including:
   1. (a) a reasonable summary of material changes to the information previously provided; or
   2. (b) if the core information disclosures did not require any revisions or updating, confirmation of this; and
3. (2) a revised or updated product summary.

Factors requiring a review of the core information disclosures and a revision of the product summary outside of an annual review schedule include, in particular:

1. (1) a material change to a consumer composite investment's investment objectives and strategy; or
2. (2) the onset of market events or circumstances which the firm ought reasonably to know are capable of materially altering the consumer composite investment's risk and return information.

1. (1) For avoidance of doubt, the scenario in (2) is not itself a factor which the FCA would regard as requiring a review outside the annual review schedule.
2. (2) The scenario is where a consumer composite investment's initial risk and return score falls on the borderline between two risk classes in the volatility scale in DISC 5.4, such that a calculation under DISC 5.2 or DISC 5.3 (as applicable) at different times within a 12-month period might yield a slightly different annualised volatility interval resulting in the consumer composite investment falling into the risk class above, or below, its existing ranking.

The manufacturer must keep a copy of the product summary for each consumer composite investment after it is prepared and following any subsequent reviews, amendments, or updates, and keep it for at least 3 years.

Subject to DISC 3.1.4R, in preparing the product summary, the manufacturer must consider whether it is appropriate or necessary to adapt, summarise, paraphrase or supplement the core information disclosures in order to comply with DISC 3.1.2R.

Any information that is required by a rule in DISC to be presented or expressed in the product summary in a prescribed way may be supplemented in the product summary but not replaced with an adapted, summarised or paraphrased version.

1. (1) A firm must ensure that any additional product communication relating to the consumer composite investment conveyed in marketing materials, the prospectus, product documentation, or other communications with or for the retail investor is consistent with the core information disclosures and the product summary.
2. (2) If the firm adapts, summarises, paraphrases or supplements the core information disclosures in additional product communication, it must take care not to modify the substance of that information in any way.

An adaptation, summary, paraphrasing or supplementation would be deemed to modify the substance of the core information disclosures if it alters the underlying information or data about the consumer composite investment rather than how the information or data are presented or expressed.

For avoidance of doubt, an adaptation of cost and charges information or of performance information which consists of a tailored presentation of costs and charges or past performance based on the actual sum the retail investor is considering investing (or has decided to invest) does not amount to a modification of the substance of the costs and charges information or the performance information (as applicable).

For the purposes of compliance with DISC 3.1.2R, a distributor is entitled to rely on information provided or communications prepared by the manufacturer in the course of discharging its own obligations under DISC, including in particular the provision of the product summary and use of underlying core information disclosures in preparing additional product communications, provided such reliance is reasonable.

In the FCA's view, it is reasonable for the distributor to rely on information provided or communications prepared by the manufacturer where:

1. (1) the information or communication is free of any obvious inaccuracies or inconsistencies;
2. (2) the contents are unlikely to give a reasonably competent and prudent person in the distributor's position cause for concern; and
3. (3) the distributor has not identified, and is not aware of, any concerns that the information or the communication is misleading, inaccurate, or out of date in any material respect.

1. (1) Notwithstanding that it may be reasonable for a distributor to rely on information provided or a communication prepared by a manufacturer, it should have regard to its obligations under Principle 12 and PRIN 2A (the Consumer Duty) – in particular, the cross-cutting obligation to avoid causing foreseeable harm to retail customers (PRIN 2A.2.8R).
2. (2) A distributor may wish to exercise particular care when considering whether to rely on information or communications prepared or provided by a firm that is an unauthorised person. Investors will generally have limited (if any) practical recourse in respect of any losses caused by the misconduct of such a person. Moreover, a firm that is not an authorised person will not be subject to Principle 12 and PRIN 2A (the Consumer Duty), and may not be subject to any regulatory obligations other than those in DISC.

Where a firm in the distribution chain for a consumer composite investment identifies that a product summary, core information disclosures, or additional product communication contains (or may contain) information that is in any material respect misleading, inaccurate or out of date, it must promptly and appropriately:

1. (1) if they are the person who prepared the product summary, core information disclosures or additional product communication, amend or otherwise revise or update it so that it ceases to be misleading, inaccurate or out of date, or as necessary to address the concern;
2. (2) if they are not that person, raise their concerns with the person who prepared the product summary, core information disclosures or additional product communication; and
3. (3) inform other firms in the distribution chain for the consumer composite investment about the concern.

1. (1) In complying with DISC 3.4.1R, a firm should have regard to the related requirements in DISC 2A.1.4R and DISC 3.1.2R.
2. (2) The general Consumer Duty obligations in PRIN 2A.2.5R and PRIN 2A.5.14R are relevant to an authorised person's concerns relating to any communication about the consumer composite investment. For example, where the firm is concerned that information in the product summary is likely to be misunderstood by retail investors, or that information in other documents is inconsistent with the product summary, it should promptly notify the issue to the relevant firm in the distribution chain.

1. (1) In keeping with its Consumer Duty obligations, an authorised person in the distribution chain for a consumer composite investment who is alerted to potentially inaccurate or misleading information in the product summary should consider what action, if any, may be required or appropriate in order to:
   1. (a) avoid causing foreseeable harm to retail investors (PRIN 2A.2.8R); or
   2. (b) rectify the situation, if the authorised person identifies that retail investors have suffered foreseeable harm (PRIN 2A.2.5R).
2. (2) Where the concerns are sufficiently significant, the firm may conclude that the action required in the circumstances is to pause distribution of the consumer composite investment until such time as the concern has been addressed.

Where an authorised person identifies that it has provided inaccurate, misleading or out-of-date information in the product summary or in any additional product communication communicated to retail investors, it should consider whether retail investors may have suffered harm as a result. The Consumer Duty obligation in PRIN 2A.2.5R is likely to be relevant in this situation.

1. (1) An authorised fund manager must file the product summary for each UCITS scheme and non-UCITS retail scheme which it manages, and any material amendments to it, with the FCA.
2. (2) An authorised fund manager of a feeder UCITS or feeder NURS must, in addition to (1), file the product summary of its master UCITS or qualifying master scheme, and any material amendments thereto, with the FCA.

1. (1) A manufacturer must make available in machine-readable format any information in the core information disclosures that is reasonably capable of being rendered in such a format.
2. (2) The information to be made available in (1) must be provided to distributors of the relevant consumer composite investment free of charge and in an easily accessible location in the manufacturer's website.
3. (3) For the purposes of (1), information is in a machine-readable format where it is in an electronic format designed to be directly and automatically read and processed by a computer without requiring specialist software.

1. (1) A manufacturer must publish instructions (including any updates to such instructions) explaining how to use the machine-readable file or files published under DISC 3.5.2R and include a link to such instructions alongside the file or files.
2. (2) The information in (1) must include:
   1. (a) the date the core information disclosures were produced, or where subsequently revised or amended, the date of the latest revision; and
   2. (b) the rationale for any adjustment of the consumer composite investment's initial risk and return score under DISC 5.6.3R(3)

In the FCA's view, information that is provided in one or more comma-separated value (CSV) files will meet the requirement in DISC 3.5.2R to provide information in a machine-readable format.

DISC 3.5.2R does not apply where the consumer composite investment is solely distributed by its manufacturer or one or more associates of the manufacturer.