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  1. Point in time
    2007-10-31

COB 7.8 Realisation of a private customer's assets

Application

COB 7.8.1R

This section applies to a firm when it:

  1. (1)

    seeks a right; or

  2. (2)

    seeks to exercise a right;

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

COB 7.8.2G

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

COB 7.8.3R

A firm must not realise a private customer's assets unless it is legally entitled to do so, and it has either:

  1. (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)):

    1. (a)

      the action it may take to realise any assets of the private customer;

    2. (b)

      the circumstances in which it may do so; and

    3. (c)

      each asset (if relevant) or type or class of asset over which it may exercise the right; or

  2. (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.