COBS 9.1 Application and purpose provisions
Making personal recommendations
1This chapter applies to a firm
which makes a personal recommendation in relation to a designated investment.32
Providing basic advice on a stakeholder product
If a firm makes a personal recommendation in relation to a stakeholder product, other than in the course of MiFID or equivalent third country business, it may choose to give basic advice under the rules in section 9.6 of this chapter instead of the rules in the remainder of this chapter.
Managing investments
This chapter applies to a firm which manages investments.
3This chapter does not apply to a firm which manages investments when that firm takes a decision to trade for a client and that decision relates to a P2P agreement. This is because the regulated activity of managing investments does not extend to the management of assets where those assets are P2P agreements.
Business which is not MiFID or equivalent third country business
In respect of the business of a firm which is not MiFID or equivalent third country business, this chapter applies only if:
- (1)
the client is a retail client; or
- (2)
the firm is managing the assets of an occupational pension scheme, stakeholder pension scheme or personal pension scheme.
Life policies for professional clients
If the firm makes a personal recommendation to a professional client to take out a life policy, this chapter applies only those rules which implement the requirements of the Insurance Mediation Directive.
If a rule implements a requirement of the Insurance Mediation Directive, a Note follows the rule indicating which provision is being implemented. COBS 7 (Insurance mediation) contains further rules implementing the Insurance Mediation Directive.
The effect of these application rules and the fact that the Insurance Mediation Directive does not apply to an insurer (unless it is involved in mediation activities) is that this chapter does not apply to an insurer when it is making a personal recommendation to a professional client to take out a life policy.
Related rules
For a firm making personal recommendations in relation to
pensions, COBS 19 contains additional provisions relevant to assessing suitability and the contents of suitability reports.