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COBS 2.1 Acting honestly, fairly and professionally

The client's best interests rule

COBS 2.1.1RRP
  1. (1)

    1A firm must act honestly, fairly and professionally in accordance with the best interests of its client (the client's best interests rule).

  2. (2)

    This rule applies in relation to designated investment business carried on:

    1. (a)

      for a retail client; and

    2. (b)

      in relation to MiFID or equivalent third country business, for any other client.

  3. (3)

    For a management company, this rule applies in relation to any UCITS scheme or EEA UCITS scheme the firm manages.2

[Note: article 19(1) of MiFID and article 14(1)(a) and (b) of the UCITS Directive]2

Exclusion of liability

COBS 2.1.2RRP

A firm must not, in any communication relating to designated investment business seek to:

  1. (1)

    exclude or restrict; or

  2. (2)

    rely on any exclusion or restriction of;

any duty or liability it may have to a client under the regulatory system.

COBS 2.1.3GRP
  1. (1)

    In order to comply with the client's best interests rule, a firm should not, in any communication to a retail client relating to designated investment business:

    1. (a)

      seek to exclude or restrict; or

    2. (b)

      rely on any exclusion or restriction of;

    any duty or liability it may have to a client other than under the regulatory system, unless it is honest, fair and professional for it to do so.

  2. (2)

    The general law, including the Unfair Terms Regulations, also limits the scope for a firm to exclude or restrict any duty or liability to a consumer.