COBS 4.11 Record keeping: financial promotion

1. (1)

   A firm must make an adequate record of any financial promotion:10

   1. (a)

      it communicates;10

   2. (b)

      it approves; or10

   3. (c)

      of which it confirms compliance (COBS 4.10.9AR(3)(a)),10

   other than a financial promotion made in the course of a personal visit, telephone conversation or other interactive dialogue.

2. (2)

   For a telemarketing campaign, a firm must make an adequate record of copies of any scripts used.

3. (2A)

   [deleted] [Editor’s note: This provision now appears with minor amendments at COBS 4.11.4R]10

   5
4. (2B)

   In respect of each financial promotion in (1), a firm must make an adequate record demonstrating how it has satisfied itself that it has the necessary competence and expertise required by COBS 4.10.9AR.10

5. (3)

   A firm must retain the record in relation to a financial promotion relating to:

   1. (a)

      a pension transfer, pension conversion, 7 pension opt-out or FSAVC, indefinitely;

   2. (b)

      a life policy, occupational pension scheme1, SSAS, personal pension scheme or stakeholder pension scheme, for six years;

   3. (c)

      MiFID or equivalent third country business, for five years; and

   4. (d)

      any other case, for three years.

6. (4)

   4If a communication relates to a firm's MiFID, equivalent third country or optional exemption business8, this section does not apply:4

   1. (a)

      to the extent that the communication is a third party prospectus;2

   2. (b)

      if it is image advertising;2

   3. (c)

      if it is a non-retail communication.2

7. (5)

   4If a communication relates to a firm's business that is not MiFID or equivalent third country business, this section does not apply:4

   1. (a)

      to the extent that it is an excluded communication;

   2. (b)

      to the extent that it is a prospectus advertisement to which article 22 of the Prospectus Regulation9 applies;

   3. (c)

      if it is image advertising;

   4. (d)

      if it is a non-retail communication;2

   5. (e)

      [deleted]3

      3
   6. (f)

      to the extent that it relates to a pure protection contract that is a long-term care insurance contract2.

10If a firm communicates or approves a financial promotion which relates to a non-mass market investment where that financial promotion is addressed to or disseminated in such a way that it is likely to be received by a retail client:

1. (1)

   the person allocated the compliance oversight function in the firm must make a record at or near the time of the communication or approval certifying that the promotion complies with the restrictions set out in section 238 of the Act and in COBS 4.12B, as applicable;

2. (2)

   the making of the record required in (1) may be delegated to one or more employees of the firm who report to and are supervised by the person allocated the compliance oversight function, provided the process for certification of compliance has been reviewed and approved by the person allocated the compliance oversight function no more than 12 months before the date of the communication or approval of the promotion;

3. (3)

   as part of the record required in (1), the firm must make a record of which exemption was relied on for the purposes of the promotion, together with the reason why the firm is satisfied that that exemption applies;

4. (4)

   where the firm relies on an exemption that requires investor certification and warnings to investors, the record required in (1) must include a record of any certificate or investor statement (as signed by the investor) and of any warnings or indications required by the exemption;

5. (5)

   if the rules in COBS 4.12B do not apply because the promotion is an excluded communication (COBS 4.12B.4R), the firm must identify in the record required in (1) which type of financial promotion defined as an excluded communication corresponds to the promotion being made, including, where applicable, which article in the Financial Promotion Order or in the Promotion of Collective Investment Schemes Order was relied on for the purposes of the promotion, together with the reason why the firm is satisfied that the exemption applies.

1. (1)

   10This rule applies to a firm that communicates or may communicate a direct offer financial promotion in relation to a restricted mass market investment to which COBS 4.12A.15R applies.

2. (2)

   A firm must make an adequate record of:

   1. (a)

      the categorisation of each retail client (COBS 4.12A.21R) and the evidence obtained in support of that categorisation;

   2. (b)

      where an appropriateness assessment is undertaken (COBS 4.12A.28R):

      1. (i)

         the total number of assessments undertaken;

      2. (ii)

         the number of assessments resulting in a determination that the investment was appropriate;

      3. (iii)

         the number of assessments resulting in a determination that the investment was not appropriate;

      4. (iv)

         in respect of each retail client, the outcome of the appropriateness process; and

      5. (v)

         in respect of each retail client, the number of times that retail client was subject to an appropriateness assessment in respect of the same investment.

10A firm that approves a direct offer financial promotion in relation to a restricted mass market investment to which COBS 4.12A.15R applies must take reasonable steps to ensure that:

1. (1)

   adequate records of the information required by COBS 4.11.5R are made in connection with the communication of the direct offer financial promotion; and

2. (2)

   the firm is provided with, or otherwise has ready access to, the records in (1).

10A firm must retain the records required by COBS 4.11.4R and COBS 4.11.5R for 5 years.

10Where a firm is required by COBS 4.12A.44R(2)(b) or COBS 4.12B.13R(2)(b) to maintain a record of its grounds for using an alternative form of risk summary, it must retain the record of its decision for 5 years.