COBS 2.2 Information disclosure before providing services (other than MiFID and insurance distribution)

1. (1)

   [deleted]5

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2. (2)

   This section applies in relation to5 designated investment business (6other than MiFID, equivalent third country or optional exemption business or insurance distribution activities)6, carried on for a retail client:

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   1. (a)

      in relation to a derivative, a warrant, a non-readily realisable security, a speculative illiquid security,7 a P2P agreement,4 or stock lending activity, but as regards the matters in COBS 2.2.1R (1)(b) only; and

   2. (b)

      in relation to a retail investment product2, but as regards the matters in COBS 2.2.1R (1)(a) and (d) only.

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3. (3)

   7Where a rule in this section applies to a firm carrying on designated investment business in relation to a speculative illiquid security the rule also applies to:

   1. (a)

      a TP firm (to the extent that the rule does not already apply to such a TP firm as a result of GEN 2.2.26R); and

   2. (b)

      a Gibraltar-based firm (having the same meaning as in the Gibraltar Order) to the extent that the rule does not already apply to such a Gibraltar-based firm as a result of GEN 2.3.1R).

1. (1)

   A firm must provide appropriate information in a comprehensible form to a client about:

   1. (a)

      the firm and its services;

   2. (b)

      designated investments and proposed investment strategies; including appropriate guidance on and warnings of the risks associated with investments in those designated investments or in respect of particular investment strategies;

   3. (c)

      execution venues; and

   4. (d)

      costs and associated charges;

   so that the client is reasonably able to understand the nature and risks of the service and of the specific type of designated investment that is being offered and, consequently, to take investment decisions on an informed basis.

2. (2)

   That information may be provided in a standardised format.

3. (3)

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4. (4)

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3A firm, other than a venture capital firm, which is managing investments for a professional client that is not a natural person must disclose clearly on its website, or if it does not have a website in another accessible form:

1. (1)

   the nature of its commitment to the Financial Reporting Council’s Stewardship Code; or

2. (2)

   where it does not commit to the Code, its alternative investment strategy.