DISC 5.1 General

The risk and return information comprises the following, to be prepared in accordance with the requirements of this section:

1. (1) the consumer composite investment's risk and return score and a narrative explanation of it;
2. (2) a narrative explanation of any materially relevant risks to the value, performance or investment returns of the consumer composite investment;
3. (3) any applicable risk warnings or statements required under this chapter; and
4. (4) the additional risk and return information as set out in DISC 5.8.

A manufacturer must calculate the risk and return score for the consumer composite investment or for each underlying investment option of a multi-option consumer composite investment by:

1. (1) following the applicable methodology in DISC 5.1.3R to produce an initial score, and then
2. (2) adjusting the score where appropriate and in accordance with DISC 5.6.

1. (1) Subject to (2) and (3) as applicable, the manufacturer must calculate an initial score for the consumer composite investment in accordance with the volatility calculation methodology set out in DISC 5.2 and the ranking in DISC 5.4.
2. (2) For a consumer composite investment which is a structured product, the manufacturer must calculate an initial score in accordance with the volatility calculation methodology set out in DISC 5.3 and the ranking in DISC 5.4.
3. (3) For a consumer composite investment to which DISC 5.5 applies, the manufacturer must identify the applicable pre-set initial score in accordance with that section

1. (1) A manufacturer must identify and prominently disclose as part of the risk and return information in DISC 5.1.1R(2) any material risks which are relevant to the consumer composite investment in addition to volatility.
2. (2) The risks in (1) include, in particular and as applicable to the consumer composite investment:
   1. (a) credit or counterparty risks;
   2. (b) operational risks (for example, relating to the safekeeping of assets);
   3. (c) the impact of any transactions in derivatives or forward transactions;
   4. (d) the use of leverage;
   5. (e) a fixed investment term or a forced disinvestment timeframe that does not allow the investor to ride out unfavourable market conditions; or
   6. (f) any other significant risk factor which could be materially relevant to the performance of or return on a consumer composite investment, including any factor not transparent to the market.