COB 1.9 Application in relation to electronic commerce activities and communications12

1. (1)

   1COB 1.9.1 G and COB 1.9.2 G apply to a firm:2

   1. (a)

      which is an electronic commerce activity provider, that is, any firm which carries on an electronic commerce activity; and2

   2. (b)

      in relation to a financial promotion which is an electronic commerce communication.2

2. (2)

   Paragraph (1) means that firms need to be aware of this section whenever they are providing a service which:

   1. (a)

      is normally provided for remuneration;

   2. (b)

      is provided at a distance;

   3. (c)

      is so provided by means of electronic equipment for the processing (including digital compression) and storage of data; and

   4. (d)

      is so provided at the individual request of a recipient of the service.

3. (3)

   The purpose of this section is to indicate, for the benefit of such firms, the extent to which and the general manner in which the normal provisions of COB are modified by ECO.

The modifications made to COB resulting from the introduction of the E-Commerce Directive are of three kinds:

1. (1)

   ECO 1.1.6 R modifies COB so that a firm providing an electronic commerce activity from an establishment elsewhere in the EEA to a recipient who is in the United Kingdom (an incoming ECA provider) is not required to comply with any provision of COB except to the extent required by ECO 1. These exceptions relate to the 'consumer contract derogation' (see ECO 1.2) and to the 'insurance derogation' (see ECO 1.3);

2. (2)

   ECO 2:

   1. (a)

      modifies COB so that, in relation to a financial promotion which is an outgoing electronic commerce communication, COB 3 has an extended application to cover the whole of the EEA;2

   2. (b)

      obliges such a firm, in providing an electronic commerce activity within the EEA, to comply with the minimum information and other requirements in the E-Commerce Directive; and

   3. (c)

      relieves such a firm of the obligations covered by the derogations in ECO 1.

   otherwise COB applies in the usual way to such a firm.

3. (3)

   ECO 3 applies to a firm providing an electronic commerce activity from an establishment in the United Kingdom to a recipient who is in the United Kingdom or in a non-EEA State (a domestic ECA provider). Such a firm has to comply with COB in the usual way and so the requirements in ECO 3 are in addition to COB. ECO 3 sets out the minimum information and other requirements in the E-Commerce Directive.

3The Distance Marketing Directive is also relevant for electronic commerce activities and communications. The E-Commerce Directive applies in relation to any commercial transaction entered into over the Internet; the Distance Marketing Directive applies only in relation to contracts for financial services concluded exclusively by any means of distance communication such as telephone, fax or mail as well as electronic communications. COB 1.10.3G (2)(b) (Application of the Distance Marketing Directive and the Distance Marketing Regulations) provides guidance on the Distance Marketing Directive.