retail market business

215the regulated activities and ancillary activities to those activities, payment services, issuing electronic money, and activities connected to the provision of payment services or issuing of electronic money, of a firm in a distribution chain (including a manufacturer and a distributor) which involves a retail customer, but not including the following activities:

1. (1) the manufacture of a product that is:
   1. (a) only marketed and approved for distribution to non-retail customers; and
   2. (b) not a product provided by Firm A to Firm B (further to an arrangement between them) to enable Firm B to distribute another product to a retail customer, or operate a specified investment held by a retail customer;
2. (2) activities carried on in relation to non-retail financial instruments;
3. (3) an offer and any associated promotional communications, where that offer is:
   1. (a) carried on by a firm with or for any issuer, holder or owner of a financial instrument and relates to the offer, issue, underwriting, repurchase, exchange or redemption of, or the variation of the terms of that financial instrument or any related matter; and
   2. (b) of a financial instrument which meets all the following criteria:
      1. (i) it is when issued, traded or intended to be traded on an RIE or trading venue operated by a regulated market;
      2. (ii) it does not involve any actual or potential liability for the investor that exceeds the cost of acquiring the instrument;
      3. (iii) it does not incorporate a clause, condition or trigger that could fundamentally alter the nature or risk of the investment or pay out profile, such as investments that incorporate a right to convert the instrument into a different investment; or where the return of initial capital invested at the end of the investment period is linked by a pre-set formula to the performance of an index, a combination of indices, a 'basket' of selected stocks (typically from an index or indices), or other factor or combination of factors;
      4. (iv) it does not include any explicit or implicit exit charges that have the effect of making the investment illiquid even though there are technically frequent opportunities to dispose of, redeem or otherwise realise it;
      5. (v) it is not a collective investment scheme or an AIF; and
      6. (vi) it is not a structured finance product;
   [Note: paragraphs (ii) to (iv) derive from article 57 of the MiFID Org Regulation]
4. (4) activities carried on in relation to contracts of large risks for a commercial customer or where the risk is located outside the United Kingdom;
5. (5) the regulated activity of administering a benchmark, any ancillary activity to that activity and any activities undertaken by a benchmark administrator for the purpose of complying with the Benchmarks Regulation;
6. (6) insurance distribution activities carried on by a firm in respect of a group policy that:
   1. (a) are carried on by the firm at the time the group policy is entered into or subsequently;
   2. (b) are for the purpose of a person, other than the legal holder of the policy, becoming a policyholder; and
   3. (c) do not involve any direct contact between the firm and that person.