PROD 1.3 Application of PROD 3

PROD 3 applies to

1. (1)

   a MiFID investment firm;

2. (2)

   a CRD credit institution;

3. (3)

   a MiFID optional exemption firm; and

4. (4)

   branches of third country investment firms;

5. with respect to:

6. (5)

   manufacturing financial instruments and structured deposits; and

7. (6)

   distributing financial instruments, structured deposits and investment services.

[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 in PROD 1.3 and PROD 3 in relation to a pathway investment, with respect to activities carried on from an establishment maintained by it, or its appointed representative, in the United Kingdom.

1. (1)

   Subject to (2) other firms which manufacture or distribute financial instruments or structured deposits should take account of PROD 3 as if it were guidance on the Principles and other relevant rules and as if “should” appeared in PROD 3 rules instead of “must”.

2. (2)

   Paragraph (1) does not apply to a firm to the extent that it is required to comply with Principle 12 (Consumer Duty) and PRIN 2A in relation to a product.

PROD 3.3.1R does not apply to eligible counterparty business.

[Note: article 30(1) of MiFID]

PROD 3 applies to a firm with respect to activities carried on from an establishment maintained by it, or its appointed representative, in the United Kingdom.

1. (1)

   PROD 3 also applies to a firm with respect to activities from an establishment overseas with a client in the United Kingdom.

2. (2)

   But PROD 3 does not apply to those activities if the office from which the activity is carried on were a separate person and the activity:

   1. (a)

      would fall within the overseas persons exclusions in article 72 of the Regulated Activities Order; or

   2. (b)

      would not be regarded as being carried on in the United Kingdom.