The Central Bank's Consumer Protection Code requires product producers launching a new investment product to provide details of which one of the following to any intermediary who will promote and sell that product to consumers?

• A. Projected return over five years.
• B. Nature and extent of any risks inherent in the product.
• C. Projected return, net of charges, over five years.
• D. The name of the senior executive in the product producer responsible for the design of the product.

Answer: (B)

The main point is that risk disclosure to the person who will promote and sell the product is essential for consumer protection. The Central Bank’s code requires the product producer to provide the intermediary with clear information about the nature and extent of any risks inherent in the investment. This lets the intermediary understand the risk profile, assess whether the product is suitable for a given client, and explain these risks accurately to consumers. The focus on risk details helps prevent mis-selling and ensures clients receive an honest view of potential downsides. Projections of returns or net-of-charges figures don’t address the core need to understand risk, and naming a senior executive doesn’t inform the intermediary about the product’s risk characteristics.