COBS 4.7 Direct offer financial promotions

1. (1)

   COBS 4.7.-1AUK12 to COBS 4.7.1R contain provisions on the communication of direct offer financial promotions.

   11
2. (2)

   In broad terms:

   1. (a)

      COBS 4.7.-1AUK12 is relevant to a firm communicating a direct offer financial promotion in relation to its MiFID, equivalent third country or optional exemption business; 16

   2. (b)

      COBS 4.7.1R is relevant to a firm communicating a direct offer financial promotion that does not relate to its MiFID, equivalent third country or optional exemption business; and16

   3. (c)

      16the application of the other operative provisions in this section is not affected by reference to MiFID, equivalent third country or optional exemption business.

3. (3)

   However, a MiFID investment firm, third country investment firm or MiFID optional exemption firm which is subject to the requirements in COBS 4.7.-1AUK12 may be subject to the rule in COBS 4.7.1R to the extent that it communicates a direct offer financial promotion:

   1. (a)

      which is not a marketing communication; or

   2. (b)

      which does not relate to its MiFID, equivalent third country or optional exemption business.

The effect of GEN 2.2.22AR is that provisions in this section marked “UK”12 also apply in relation to the equivalent business of a third country investment firm as if they were rules.

For the purposes of COBS 4.7.-1AUK12, the provisions of articles 47 to 50 of the MiFID Org Regulation can be found reproduced in COBS 6.1ZA and COBS 14.3A.

Although COBS 4.7.1R (1)(b) does not apply in relation to MiFID, equivalent third country or optional exemption business11, similar requirements may apply under COBS 2.2A11.

1. (1)

   6BCOBS 2A contains rules and guidance about the inclusion of a summary box in a direct offer financial promotion relating to a cash deposit ISA or cash deposit CTF provided by a firm other than a credit union.

2. (2)

   Where BCOBS 2A applies, COBS 4.7.1R(1)(b) does not require a firm to include information outside a summary box in a direct offer financial promotion to the extent that this would simply repeat information included in a summary box in the same financial promotion.

1. (1)

   COBS 4.7.1R (2) allows a firm to communicate a direct offer financial promotion that does not contain all the information required by COBS 4.7.1R (1), if the firm can demonstrate that the client has referred to the required information before the client makes or accepts an offer in response to the direct offer financial promotion.

2. (2)

   A firmcommunicating or approving a direct offer financial promotion may also be subject to:10

   1. (a)

      the rules on providing product information in COBS 14.2, including the exceptions in COBS 14.2.5R to 14.2.9R; and10

   2. (b)

      the requirement in the PRIIPs Regulation to provide a key information document10.

In order to enable a client to make an informed assessment of a relevant investment or relevant business, a firm may wish to include in a direct offer financial promotion:

1. (1)

   a summary of the taxation of any investment to which it relates and the taxation consequences for the average member of the group to whom it is directed or by whom it is likely to be received;1

2. (2)

   a statement that the recipient should seek a personal recommendation if he has any doubt about the suitability of the investments or services being promoted; and1

3. (3)

   (in relation to a promotion for a non-PRIIP packaged product10 that is not a financial instrument) a key features illustration, in which a generic projection may generally be used.1

4 COBS 4.13.2 R (Marketing communications relating to UCITS schemes12) and COBS 4.13.3 R (Marketing communications relating to feeder UCITS) contain additional disclosure requirements for firms in relation to marketing communications (other than key investor information) that concern particular investment strategies of a UCITS scheme12

14 Firms are reminded of their obligations in relation to the marketing, distribution and sale of restricted speculative investments in COBS 22.5.

18 19 Firms are reminded of the prohibitions in relation to the marketing, distribution and sale of cryptoasset derivatives and cryptoasset exchange traded notes in COBS 22.6.