COBS 9.1 Application and purpose provisions
Application
1This chapter applies to a firm which:4
- (a)
4makes a personal recommendation to a retail client in relation to a designated investment;
- (b)
4manages investments of a retail client of the firm;
- (c)
4manages the assets of an occupational pension scheme, stakeholder pension scheme or personal pension scheme,4other than in relation to its MiFID, equivalent third country or optional exemption business or to an insurance-based investment product5.
4COBS 9A contains suitability requirements which apply in respect of insurance-based investment products, or5 in respect of a firm’s MiFID, equivalent third country or optional exemption business involving the provision of investment advice or portfolio management.
Providing basic advice on a stakeholder product
If a firm to which this chapter applies5 makes a personal recommendation in relation to a stakeholder product5 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.
P2P agreements
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.
Life policies for professional clients
If the firm makes a personal recommendation to a professional client to take out a life policy which is not an insurance-based investment product5, this chapter applies, but4 only those rules which implemented6 the requirements of the IDD5.
If a rule implemented6 a requirement of the IDD5, a Note (“Note:”)5 follows the rule indicating which provision was6 being implemented. COBS 2.1 (acting honestly fairly and professionally), COBS 2.6 (additional insurance distribution obligations, COBS 4 (communicating with clients), COBS 6 (information about the firm, its services and remuneration) and COBS 14 (product information) contains contain further rules which implemented6 the IDD5
Related rules
For a firm making personal recommendations in relation to pensions:7
- (1)
COBS 19.1 contains additional provisions relevant to assessing suitability and the contents of suitability reports for full pension transfer or conversion advice; and7
- (2)
COBS 19.1A contains additional provisions relevant to assessing suitability and the contents of suitability reports for abridged advice.7
COBS 6.1ZA5 (Insurance mediation) contains requirements relating to the basis on which certain recommendations may be made, including requirements relating to fair analysis and range and scope.