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  4. Point in time
    2007-10-05

COB 1.2 General application: who?

COB 1.2.1 R

COB applies to every firm in respect of the activities set out in COB 1.3.1 R6, except that:

  1. (1)

    4[deleted]3

  2. (2)

    for a UCITS qualifier and a service company that does not operate an ATS, only COB 1.9 (Application to electronic commerce activity providers),8COB 3 (Financial promotion),COB 7.17 (Investment research recommendations: required disclosures)8 and any provision of COB incorporated into COB 1.9 or COB 3 by reference, apply;1

    8
  3. (2A)

    4for a service company that operates an ATS, only COB 1.9 and COB 3, any provision of COB incorporated into COB 1.9 or COB 3 by reference, and COB 7.17 (Investment research recommendations: required disclosures)8 and, in relation to the operation of the ATS, COB 4.2 (Terms of business), apply;2

  4. (3)

    COB does not apply to an ICVC; 7

  5. (4)

    COB does not apply to an authorised professional firm with respect to its non-mainstream regulated activities except for:

    1. (a)

      COB 2.1 (Clear, fair and not misleading communication);

    2. (b)

      COB 3 (Financial promotion); and

    3. (c)

      the following provisions of COB 4.2 (Terms of business and client agreements with customers): COB 4.2.1 R to COB 4.2.6 G, COB 4.2.12A E and COB 4 Ann 2E(25); and57

    4. (d)

      the IMD minimum implementation provisions and COB 4.3.19 R to COB 4.3.25 R as if they also applied to a firm carrying out the activities in COB 4.3.19R (1)(a) with or on behalf of private customers, unless:7

      1. (i)

        the designated professional body of the firm has made rules which implement some or all of the provisions of articles 12 and 13 of the IMD;7

      2. (ii)

        those rules have been approved by the FSA under section 332(5) of the Act; and7

      3. (iii)

        the firm is subject to the rules in the form in which they were approved;7

      in which case they are disapplied to the extent that articles 12 and 13 of the IMD are implemented by the rules of the designated professional body.7

COB 1.2.1A G

If a firm engages in insurance mediation activities for non-investment insurance contracts, ICOB applies and COB does not apply.6

COB 1.2.1B G

7The effect of COB 1.2.1 R (4)(d) is that if the relevant designated professional body of an authorised professional firm does not make rules implementing articles 12 and 13 of the IMD applicable to authorised professional firms, those firms will need to comply with:

(a) the IMD minimum implementation provisions; and

(b) COB 4.3.19 R to COB 4.3.25 R as if they also applied to a firm carrying out the activities in COB 4.3.19R (1)(a) with or on behalf of private customers.

COB 1.2.2 G

A UCITS qualifier should be aware of the requirements of CIS 17.4 (Facilities in the United Kingdom).

COB 1.2.3 G

COB 6.7 (Cancellation and withdrawal) confers rights on customers to rescind agreements with, or withdraw offers from, firms within a specified period.

COB 1.2.4 G

COB 3 (Financial promotion) is available for nationals of EEA States (other than the United Kingdom) wishing to take advantage of article 36 of the Financial Promotion Order.

COB 1.2.5 G

Authorised professional firms should be aware of the following:

  1. (1)

    PROF 5 (Non-mainstream regulated activities);5

  2. (2)

    COB 3.1.5 R (Authorised professional firms) and the exemption in article 55 of the Financial Promotion Order (Communications by members of professions) which applies in relation to financial promotions of authorised professional firms under COB 3.5.5 R (2) (Exemptions);

    8
  3. (3)

    COB 4.2.3 G which contains guidance for authorised professional firms on the provision of terms of business; and8

    8
  4. (4)

    COB 7.17 which relates to disclosures required to be made in relation to investment research recommendations as a result of the Market Abuse Directive.8

Use of third party processors in life insurance mediation activities

COB 1.2.6 R
  1. (1)

    9Where a firm (or its appointed representative) outsources insurance mediation activities to a third party processor, it is responsible for the acts and omissions of that third party processor conducting those outsourced activities. In these circumstances, any COB rules requiring the third party processor to disclose identity to customers must be interpreted as a requirement to disclose the firm's identity.

  2. (2)

    If the third party processor is advising on investments, (1) does not apply.