CIPR 3.5.9 Inducements — financial assistance by product providers

(1) This rule applies in relation to an authorised firm that holds itself out as offering investment advice to retail customers in relation to 1 or more kinds of packaged investment product.
(2) A product provider must not acquire a direct or indirect holding in the capital or voting power of an authorised firm in relation to which this rule applies, or provide credit to such a firm, unless:
(a) the product provider and the firm are in the same corporate group;
(b) in relation to the provision of credit — the credit provided is for commission owing from the firm to the product provider under an indemnity commission clawback arrangement; or
(c) the holding is acquired, or the credit is provided, on objective commercial terms.
(3) In subrule (2) (c), objective commercial terms means terms that are objectively comparable to terms on which a person that is not connected to the product provider would be willing to acquire the holding or provide credit, taking into account all the circumstances.
(4) For this rule, any holding of, or credit provided by, a product provider's associate is taken to be held by, or provided by, the product provider.
Derived from QFCRA RM/2019-2 (as from 1st January 2020).