DDDQ SHORT FORM INDIVIDUAL LEVEL

DISTRIBUTOR DUE DILIGENCE QUESTIONNAIRE: INDIVIDUAL ADVISER LEVEL

Our Responsibilities

Under the FCA's Product Governance Sourcebook (PROD) we are required to "take reasonable steps to ensure that the financial instrument (i.e. our product) is distributed to the identified target market" (PROD 3.2(3)).

We therefore ask Professional Adviser firms to complete a Distribution Due Diligence Questionnaire (DDDQ). Where a firm has not completed our DDDQ, we require individual Professional Advisers to complete the Individual Adviser Level DDDQ, pending the Firm Level DDDQ being completed.

Depending on the answers that you provide, we may need to discuss any relevant circumstances with you and / or your firm.

Please click here if you would like to understand more about why we ask the questions in our DDDQ

Under the FCA’s Product Governance Sourcebook (PROD) we are required to “take reasonable steps to ensure that the financial instrument (i.e. our products) is distributed to the identified target market” (PROD 3.2 (3)).

We also “should have in place systems and controls to manage adequately the risks posed by financial instrument design” (PROD 3.2.5) and should ensure “the selection of appropriate distribution channels and the promotion of the financial instruments are accompanied by sufficient and correct information” (PROD 3.2.2).

We meet these responsibilities through a number of measures, including:

Restricting distribution to UK based FCA authorised Professional Advisers permitted to undertake regulated activities;
Taking reasonable steps to confirm that the Professional Advisers using our products do not present any distribution risks that we can identify / seeking to identify any Professional Advisers who may present potential distribution risks;
Taking reasonable steps to confirm that Professional Advisers using our products have a business model and approach to client advice and use of structured products that is consistent with our identified target market;
Taking reasonable steps to confirm that the Professional Advisers using our products have sufficient knowledge and / or experience to distribute structured products;
Aiming to provide all relevant information to the Professional Advisers using our products and requiring them to distribute our products in accordance with that information (including mutual obligations outlined in our Professional Adviser Terms of Business);
Documenting evidence to support the above; and
Analysing management information on the distribution of our products, to identify if they are being distributed in accordance with the identified target markets.

We undertake a number of checks.

We check firms' addresses to ensure they are UK based.

We check firms' entries in the FCA Register (and potentially other sources), identifying if there is evidence of any criticisms, censures, disciplinary actions, fines or similar. If so, we may need to discuss the circumstances of these with your firm.

Distributor Due Diligence Questionnaire Section 1

Please provide the following details about yourself and your firm.

1. Please provide your name, job title and contact details:

Name:*

Job title:*

Telephone:*

Email:*

1.2 Please provide the name of your firm:*

1.3 Please provide the name of the principal (managing director or managing partner) of your firm:*

1.4 Please provide your full office address:

Address line 1:

Address line 2:

Town:*

County:

Postcode:*

Country:*

UK
Other

If 'other', please specify which country:

1.5 Is your firm authorised by the FCA?*

Yes
No

Is your firm authorised by any equivalent regulatory body in or outside the UK?

Yes
No

Please specify:

1.6 Is your firm an Appointed Representative?*

Yes
No

If 'yes', please provide the name of the Principal Firm:

1.7 Is your firm part of a network (or similar arrangement)?*

Yes
No

If 'yes', please provide details:

1.8 Please provide the details of your firm's compliance officer:

Name:*

Telephone:*

Email:*

1.9 Does your firm use an external compliance service provider?*

Yes
No

If 'yes', please provide details:

1.10 Please provide your firm's FCA FRN (Firm Reference Number):*

1.10 Please provide your own FCA IRN (Individual Reference Number):*

Distributor Due Diligence Questionnaire Section 2

We would like to ask you about your business model, client base and approach when using structured products.

Please note that these questions refer to you individually, not to the firm that you are part of.

Please click here if you would like to understand more about why we ask the following questions.

Our products are designed for investors who take advice from an authorised and regulated investment firm, who assess suitability, or self-directed investors investing through an authorised and regulated investment firm, who assess appropriateness.

Our products are designed to be used as part of diversified and balanced portfolios. In October 2009, in its analysis of the quality of investment advice in relation to structured products, the FSA provided 'good practice' guidances regarding the percentage (25% total exposure to structured products and 10% to any single counterparty) of a diversified portfolio, above which use of structured products should be more carefully considered.

We therefore need to ask some questions regarding Professional Advisers' business models, client bases, typical clients and approach to typical client portfolios.

2.1. What percentage of your business is:

Advised, with suitability assessed?*

Execution only, with appropriateness assessed?*

2.2 What percentage of your clients are under 25 or over 85 years old?

Less than 25%
Between 25% and 50%
Between 50% and 75%
More than 75%

2.3. What percentage of your clients have net wealth (including the value of their home, less any mortgage) of less than £100k?

Less than 25%
Between 25% and 50%
Between 50% and 75%
More than 75%

2.4. What is the typical percentage of structured products in a typical portfolio (by value) for your clients?

Less than 25%
Between 25% and 50%
Between 50% and 75%
More than 75%

Distributor Due Diligence Questionnaire Section 3

We would like to ask you about your level of understanding of structured products.

Please click here if you would like to understand more about why we ask the following questions.

Professional Advisers have a regulatory responsibility to meet product governance responsibilities under PROD (particularly PROD 3.3.1), which states that they must:

Understand the products they distribute to their clients;
Assess the compatibility of products with the needs of the clients to whom they distribute investment services, taking into account our identified target market of end clients; and
Ensure that products are distributed only when this is in the best interests of clients.

We rely on Professional Advisers discharging their responsibilities to ensure that any distribution of our products is to our identified target markets.

We aim to distribute our products through Professional Advisers who have sufficient general understanding of structured products to meet this responsibility and to provide training to those Professional Advisers that require it.

3.1 Are you personally qualified to Level 4 of the Qualifications and Credit Framework (WCF)?*

Yes
No

3.2 Are you confident in explaining all of the features and risks of structured products (including issuer / counterparty risk, market risk and operational risk)?*

Yes
No

3.3 Are you aware of regulatory requirements and expectations regarding advising on structured products?*

Yes
No

3.4 Would you like to discuss any educational and training input?*

Yes
No

Distributor Due Diligence Questionnaire Section 4

We would like to ask you about your investment views

Please click here if you would like to understand more about why we ask the following questions.

All of our structured products are designed with deep end of term barriers (set at 60% of the start level). If the barriers are breached, this will result in an investor losing capital. All of our structured products are designed so that they can generate some or all of their potential returns without requiring the stockmarket to rise. We therefore want to ask some basic questions regarding Professional Advisers' investment views, to check that they are not inconsistent with the risks and features of our products.

4.1 What level of confidence (with 1 being least confident and 10 most confident) do you have that:*

Distributor Due Diligence Questionnaire Section 5

We need to ask you some questions about your complaints history.

Please note that these questions refer to you individually, not to the firm that you are part of.

Please click here if you would like to understand more about why we ask the following questions.

In order to get a feel for Professional Advisers' reputations and track records, we would like to ask you the following simple questions.

5.1 Have more than 1% of your clients complained in the last 36 months?

Yes
No

5.2 How many of these complaints have been in relation to structured products?

5.3 Have you previously been refused terms of business with any structured product provider?

Yes
No

5.4 Have you previously been refused terms of business with any financial services (including investment, life and pensions) provider?

Yes
No

If you have answered yes to any of the above questions, please provide brief details below. Depending on your answers, we may need to discuss any relevant circumstances with you and / or your firm.

Distributor Due Diligence Questionnaire Section 6

Our Terms of Business

When our Plan Administrator receives an application from you for an investment into our structured products on behalf of your client(s), you will be deemed to have accepted our Terms of Business.

Our Terms of Business include various warranties by you and place obligations on you which we rely on, as part of our distributor due diligence.

To view our Terms of Business, click here.

Distributor Due Diligence Questionnaire Section 7

Details required by our Plan Administrator to facilitate the payment of adviser fees.

Our Plan Administrator, James Brearley & Sons Limited, can facilitate the payment of adviser fees, agreed between your firm and your clients. In order to do this, they require your firm's bank details. To ensure that they record the bank details correctly, and to protect you from fraud, they require either:

Confirmation that account details that they may already hold for your firm (if you already have a relationship with James Brearley) can be used.
A voided cheque, certified for your firm's bank account.

Please tick the box below if you already have a relationship with James Brearley and you wish them to use the same bank account details.

I confirm that James Brearley can pay pay adviser fees to the account they have on record for my firm

Otherwise, please provide details of someone that James Brearley can contact to request verification of your bank account details:

Distributor Due Diligence Questionnaire Section 8

Details required by our Plan Administrator to operate your online client accounts

8.1 Our Plan Administrator provides professional advisers with details of their clients' holdings via our online web portal. Are there any other individuals in your firm who you wish to be able to access information for all of your clients?

Yes
No

Please provide their details below (name, position, email address and telephone number). You can provide details for more than one person if you wish:

8.2 Our Plan Administrator emails notifications of client correspondence to professional advisers, which can then be accessed via our online web portal. Are there any other individuals in your firm who should be sent notification of correspondence for all of your clients?

Yes
No

Please provide their details below (name, position, email address and telephone number). You can provide details for more than one person if you wish:

Thank you for completing this questionnaire...

A member of our business development team will be in touch shortly. Do please contact us directly if you require any assistance immediately.

If you would like to have a chat about structured products and / or any aspect of Tempo Structured Products with our Global Head of Structured Products, Chris Taylor, please tick the following box:

Please call me on the telephone number provided earlier in this form
Please email me using the email address provided earlier in this form

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The FTSE 100 will be above 60% of its current level in 10 years time?
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