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You are viewing the version of the document as on 2023-09-08.

COBS 3.1 Application

Scope

COBS 3.1.1R

1The scope of this chapter is the same as that of the rules in the Handbook to which it relates.

COBS 3.1.2GRP

This chapter relates to parts of the Handbook whose application depends on whether a person is a client, a retail client, a professional client or an eligible counterparty. However, it does not apply to the extent that another part of the Handbook provides for a different approach to client categorisation. For example, a separate approach to client categorisation is set out in the definition of a retail client for a firm that gives basic advice2.

COBS 3.1.2AR

3Subject to COBS 3.1.3R and COBS 3.6.4CR, in this chapter provisions marked “UK”5 apply to a firm’s business other than MiFID business as if they were rules.

COBS 3.1.3RRP

The sections in this chapter on general notifications (COBS 3.3) and policies, procedures and records (COBS 3.8) do not apply in relation to a firm that is neither:

  1. (1)

    conducting designated investment business; nor

  2. (2)

    in the case of MiFID or equivalent third country business providing an ancillary service that does not constitute designated investment business.

Mixed business

COBS 3.1.4RRP

If a firm conducts business for a client involving both:

  1. (1)

    MiFID or equivalent third country business; and

  2. (2)

    other regulated activities subject to this chapter;

it must categorise that client for such business in accordance with the provisions in this chapter that apply to MiFID or equivalent third country business, including those provisions applied to the equivalent business of a third country investment firm4 as a result of COBS 3.1.2AR3.

COBS 3.1.5GRP

  1. (1)

    For example, the requirement concerning mixed business will apply if a MiFID investment firm or third country investment firm3 advises a client on whether to invest in a scheme or a life policy. This is because the former is within the scope of MiFID and the latter is not. In such a case, the MiFID client categorisation requirements prevail.

  2. (2)

    The requirement does not apply where the MiFID or equivalent third country business is provided separately from the other regulated activities. Where this is the case, in accordance with Principle 7 (communications with clients) the basis on which the different activities will be performed, including any differences in the categorisations that apply, should be made clear to the client.