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  2. Point in time
    2018-12-13

COBS 2.3C Research and execution services

Application

COBS 2.3C.1R

1This section applies to an investment firm providing execution services to:

  1. (1)

    a firm carrying on MiFID, equivalent third country or optional exemption business; or

  2. (2)

    an investment firm authorised under MiFID that is not within (1); or

  3. (3)

    a UCITS management company; or

  4. (4)

    a full-scope UK AIFM; or

  5. (5)

    a small authorised UK AIFM; or

  6. (6)

    a residual CIS operator; or

  7. (7)

    an incoming EEA AIFM branch2; or

  8. (8)

    2an OPS firm.

Requirement on a firm that executes orders and provides research to price and supply services separately

COBS 2.3C.2R

A firm providing execution services must:

  1. (1)

    identify separate charges for its execution services that only reflect the cost of executing the transaction;

  2. (2)

    subject each other benefit or service (other than an acceptable minor non-monetary benefit in COBS 2.3A.19R) which it provides to persons listed in COBS 2.3C.1R(1) to (6) to a separately identifiable charge; and

  3. (3)

    ensure that the supply of, and charges for, other benefits or services under (2) is not influenced or conditioned by levels of payment for execution services.

[Note: article 13(9) of the MiFID Delegated Directive]

COBS 2.3C.3R

A firm providing both execution and research services must price and supply them separately.

COBS 2.3C.4G

Compliance with COBS 2.3C.2R is intended to enable a firm subject to COBS 2.3A.15R and COBS 2.3A.16R to comply with its obligation not to accept and retain fees, commissions or any monetary or non-monetary benefits paid or provided by any third party or a person acting on behalf of a third party in relation to the provision of the service to clients.

[Note: recital 26 to the MiFID Delegated Directive]