CIPR 3.5.8 Inducements — packaged investment products

An authorised firm must not enter into, and must take reasonable steps to ensure that no person acting on its behalf enters into, any of the following arrangements with another person in relation to a packaged investment product:

(a) volume overrides (that is, the commission paid in relation to several transactions is more than a simple multiple of the commission payable in relation to a single transaction of the same kind);
(b) an arrangement to pay more commission than the amount disclosed to the customer;
(c) an agreement to indemnify the payment of commission on terms that would or might give an additional financial benefit to the recipient if the commission became repayable;
(d) an arrangement to pay commission otherwise than to the authorised firm that was responsible for a sale, unless:
(i) that firm has passed on its right to receive the commission to the recipient;
(ii) the recipient is another authorised firm that has given advice on investments to the customer concerned after the sale; or
(iii) the recipient is another authorised firm and the commission is paid after the sale of the packaged investment product by the first firm in response to a direct offer advertisement communicated by that firm to a customer of the recipient.
Derived from QFCRA RM/2019-2 (as from 1st January 2020).