COB 7.8 Realisation of a private customer's assets
Application
This section applies to a firm when it:
to realise a private customer's assets in order to discharge an obligation of that private customer which arises from designated investment business conducted by the firm.
Purpose
Principle 6 (Customers' interests) requires a firm to pay due regard to the interests of its customers and treat them fairly. This section therefore aims to ensure that a firm, where relevant, discloses to a private customer, in the terms of business, that it may exercise remedies involving the realisation of assets.
Contractual rights to realise a private customer's assets
A firm must not realise a private customer's assets unless it is legally entitled to do so, and it has either:
- (1)
set out in the terms of business provided to the private customer in accordance with COB 4.2.5 R (Requirement to provide terms of business to a customer) (or a client agreement entered into in accordance with COB 4.2.7 R (Requirement to enter into a client agreement with a private customer)):
- (a)
the action it may take to realise any assets of the private customer;
- (b)
the circumstances in which it may do so; and
- (c)
each asset (if relevant) or type or class of asset over which it may exercise the right; or
- (a)
- (2)
given the private customer notice (oral or written) of its intention to exercise its rights at least three business days before it does so.