DISC 5.8 Product summary: Additional risk and return information

1. The product summary must include the following additional information:
2. (1) a narrative explanation of the relationship between risk and performance and how the performance of a consumer composite investment impacts its risk and return profile;
3. (2) appropriate performance information, summarising in narrative form the main drivers of investment performance for the consumer composite investment and identifying those most likely to determine the outcome of the investment and other factors which could have a material impact on performance;
4. (3) a narrative description of the factors that increase the investment risk of the consumer composite investment;
5. (4) a brief explanation of the kinds of conditions whereby the consumer composite investment is likely to generate lower or higher returns, or lead to investment loss or gains;
6. (5) for a consumer composite investment with a material liquidity risk, a warning to this effect and a brief explanation of this risk;
7. (6) a brief description of what outcome the investor may expect when the consumer composite investment matures or is redeemed, sold or encashed under severely adverse market conditions;
8. (7) the following information:
   1. (a) whether any capital protection is available in respect of the consumer composite investment, including any conditions or limitations of such protection;
   2. (b) if the consumer composite investment is exposed to issuer risk or counterparty risk, an explanation of what happens in the event of the risk crystallising;
   3. (c) if the investor might lose more than they invested or otherwise be required to make additional payments, an explanation and warning of this risk; and
   4. (d) if the investor is exposed to the risk of losing more than the original sum invested in the consumer composite investment, an explanation and warning of this risk, including an explanation of any applicable limits to that liability;
9. (8) if applicable, an explanation regarding the use of gearing as part of the consumer composite investment's investment strategy, including an explanation of the extent to which this increases the risk of loss and the potential for gains, depending on market conditions and the rate of leverage;
10. (9) if applicable, a warning to the effect that the risk of the consumer composite investment may be significantly higher than the one represented in the risk and return score where the consumer composite investment is not held to maturity or for the recommended holding period;
11. (10) for consumer composite investments with low liquidity or that are not regularly priced, a risk warning to that effect and that it may impact the retail client's ability to redeem or otherwise exit their investment;
12. (11) for a consumer composite investment with features posing material challenges to the ability of the average investor to understand its risk/reward dynamics, mechanisms or profile, a risk warning to that effect and that this may impact the retail investor's understanding of the risk and rewards of the investment;
13. (12) if applicable, an explanation that the investment return of a consumer composite investment denominated in a currency other than pounds sterling will be exposed to exchange rate risk;
14. (13) for consumer composite investments with contractually agreed-upon early exit penalties or long disinvestment notice periods, a summary of the relevant underlying conditions;
15. (14) for a structured deposit, an explanation of the risk to the interest payable, including the main drivers of that risk; and
16. (15) any applicable risk warnings provided for in FCA rules.

An example of a risk warning in DISC 5.8.1R(15) is the risk warning in COBS 4.5.16R which is applicable to a consumer composite investment that is an investment in a FIIA.