COBS TP 2 Other Transitional Provisions

42.-1

COBS 4

R

A firm communicating other than in relation to MiFID business is not required to comply with the financial promotion rules in relation to any financial promotion that:

(1) is in writing and was designed to be communicated for longer than three months in similar form;

(2) was subject to, and complied with, the relevant rules in COB 3 that were in force on or before 31 October 2007 (or was exempt from them); and

(3) continues to be fair, clear and not misleading.

1 November 2007 to 31 October 2008

1 November 2007

2.1

COBS 6.1

G

(1) If a firm provides services of an ongoing nature to an existing client it need not provide information to that client that it would be required to provide under COBS to a new client but which it was not required to provide under COB.

(2) Services of an ongoing nature include safekeeping and administration investments and managing investments,

From 1 November 2007 indefinitely

1 November 2007

2.2

COBS 6.1

G

(1) If a firm provides a service for an existing client that is not of an ongoing nature and which relates to the same particular type of designated investment as a previous service, the firm need not provide information to that client that it would be required to provide under COBS 6.1 to a new client but which it was not required to provide under COB.

(2) But a firm should ensure that the client has received all relevant information in relation to a subsequent transaction, such as details of product charges that differ from those described in respect of a previous transaction.

From 1 November 2007 indefinitely

1 November 2007

32.2A

COBS 6.3 (Disclosing information about services, fees and commission – packaged products)

R

(1) A firm may use the Key facts logo on an initial disclosure document, a combined initial disclosure document or a fees and commissions statement that complied with the rules in COB 4.3 in effect on 31 October 2007.

(2) In this transitional rule, "fees and commissions statement" has the meaning given by the Handbook glossary on 31 October 2007.

From 1 November 2007 until 1 May 2008

1 November 2007

32.2A

COBS 6.3 (Disclosing information about services, fees and commission – packaged products)

G

Under GEN 5.1.5 R and COBS 6.3.4 R, a firm may not use the Key facts logo on a document designed to comply with disclosure requirements in COBS unless it is an initial disclosure document, a combined initial disclosure document or a menu prepared in accordance with COBS 6.3. COBS TP 2.2A R allows a firm to use existing stocks of the equivalent documents produced under COB for a transitional period.

From 1 November 2007 until 1 May 2008.

1 November 2007

2.3

COBS 10.1.2 R

R

For business which is not MiFID or equivalent third country business, compliance with COB 3.9.5 R (2) (Prohibited types of direct offer financial promotion) as it was in force on 31 October 2007 is treated as compliance with COBS 10.1.2 R (arranging or dealing in certain derivatives and warrants for retail clients).

From 1 November 2007 to 31 May 2008

1 November 2007

2.4

COBS 10.1.2 R

G

This transitional (COBS TP 2.3R) relates to non-MiFID or equivalent third country business arising out of a direct offer financial promotion of a derivative or warrant (or both) for a retail client. This would include, for example, sports or political spread betting. For such business, a firm may begin to comply with the new appropriateness rules at any time within six months of 1 November so long as, in the meantime, it complies with COB 3.9.5 R (2).

From 1 November 2007 to 31 May 2008

1 November 2007

42.4A

COBS 11.2

R

COBS 11.2 (Best execution) does not apply to an order from an ISA manager when acting as such which is not a MiFID investment firm or a third country investment firm for the purchase of or sale of units in a regulated collective investment scheme from or to the operator of that scheme.

From 1 November 2007 to 31 October2008

1 November 2007

42.4B

COBS 11.2

R

COBS 11.2 (Best execution) does not apply to a client order for the purchase of or sale of units in a regulated collective investment scheme directly from or to the operator of that scheme.

From 1 November 2007 to 31 October2008

1 November 2007

42.4C

COBS 12.2 and COBS 12.3

R

COB 7.16, as it was in force on 31 October 2007, continues to apply to a firm which is not a MiFID investment firm or a third country investment firm which prepares investment research for publication or distribution to its clients, or that publishes or distributes investment research to its clients unless the firm decides to comply with COBS 12.2 and COBS 12.3 sooner than 1 May 2008.

From 1 November 2007 to 30 April 2008

1 November 2007

42.4D

COBS 12.2 and COBS 12.3

G

The effect of TP 2.4CR is that for a firm which is not a MiFID investment firm or third country investment firm carrying on the activities set out in the transitional rule TP 2.4CR COB 7.16 will continue to apply until 1 May 2008, unless the firm decides to comply with COBS 12.2 and COBS 12.3 sooner than1 May 2008. From 1 May 2008 a firm to which TP 2.4CR applies must comply with the investment research provisions in COBS 12.2 and COBS 12.3.

From 1 November 2007 to 30 April 2008

1 November 2007

42.4E

COBS 12.2 and COBS 12.3

R

If a firm carrying out the activities set out in TP 2.4CR decides to comply with COBS 12.2 and COBS 12.3 sooner than1 May 2008:

(1) it must make a record of the date of the decision and the date from which it is to be effective; and

(2) from the effective date it must comply with COBS 12.2 and COBS 12.3

From 1 November 2007 to 30 April 2008

1 November 2007

2.5

COBS 13

R

(1) A firm is not required to prepare a key features document, a key features illustration4 or the Consolidated Life Directive information for a product if:

• 4the rules would have required the firm to prepare key features4 for the product if they were still in force; and
• 4the firm prepares key features4 in accordance with the rules as if they were still in force.

(2) A firm is not required to prepare a standardised deterministic projection or an alternative projection for a product in accordance with COBS 13.5.1 R or COBS 13.5.2 R if the firm prepares its projections for life policies, key features schemes, simplified prospectus schemes and stakeholder pension schemes in accordance with the rules as if they were still in force.

(3) For the purposes of this rule, 'the rules' are the rules on product disclosure and the customer's right to cancel or withdraw (COB 6) that were in force on 31 October 2007.

From 1 November 2007 until 31 October 2008

1 November 2007

2.6

COBS 14.1 and COBS 14.2

R

A firm is not required to provide a key features document, a key features illustration4 or the Consolidated Life Directive information for a product if:

• the rules would have required the firm to provide a key features document2 for that product if they were still in force;
• the firm is satisfied, on reasonable grounds, that providing a key features document2 in accordance with the rules, as if they were still in force, will not cause:
  • a client to suffer any prejudice; or
  • the firm to breach its obligations under one or more of the Principles; and
• the firm provides a key features document2 for the product in accordance with the rules as if they were still in force.

For these purposes, 'the rules' means the rules on product disclosure and the customer's right to cancel or withdraw (COB 6) that were in force on 31 October 2007.

From 1 November 2007 until 31 October 2008

1 November 2007

2.7

COBS 15

R

Cancellation

• In relation to a contract concluded before 1 November 2007 the previous cancellation rules (COB 6.7) continue to apply.
• In relation to a contract concluded on or after 1 November 2007 any pre-contract disclosure made before that date that complies with the requirements of this sourcebook is to be treated for the purposes of COBS 15 as if made under this sourcebook.

1 November 2007 for 6 months

From 1 November 2007

2.8

COBS 16.3 (Periodic statements)

G

This transitional rule applies in relation to a periodic reporting period for a periodic statement that includes 1 November 2007.

A firm may choose to comply with either COBS 16.3 or COB 8.2 in providing any periodic statement2 in relation to which this rule applies.

From 1 November 2007 indefinitely

1 November 2007

42.8A

COBS 18

R

COB, as it was in force on 31 October 2007, continues to apply to the following activities and firms in relation to business which is not MiFID or equivalent third country business and COBS does not apply during the transitional period unless the firm decides to comply with COBS sooner than1 May 2008:

(1) Energy market activity and oil market activity;

(2) activities referred to in the general application rule related to:

(a) commodity futures;

(b) commodity options;

(c) contracts for differences related to an underlying commodity; or

(d) other futures or contracts for differences which are not related to commodities, financial instruments or cash, which is not energy market activity or oil market activity;

(3) corporate finance business;

(4) a firm which is an operator of a collective investment scheme;

(5) Lloyd's market activities;

(6) depositaries;

(7) OPS firms

From 1 November 2007 to 30 April 2008

1 November 2007

42.8B

COBS 18

G

The effect of TP 2.8AR is that for firms carrying on the activities set out in the transitional rule TP 2.8AR COB will continue to apply until 1 May 2008, unless the firm decides to comply with COBS sooner than1 May 2008. From 1 May 2008 a firm to which TP 2.8AR applies must comply with COBS as set out in COBS 18.

From 1 November 2007 to 30 April 2008

1 November 2007

42.8C

COBS 18

R

If a firm carrying out the activities set out in TP 2.8AR decides to comply with COBS sooner than 1 May 2008:

(1) it must make a record of the date of the decision and the date from which it is to be effective; and

(2) subject to TP 2.8AR, from the effective date it must comply with COBS as set out in the relevant parts of COBS 18.

From 1 November 2007 to 30 April 2008

1 November 2007

42.8D

COBS 18

G

In accordance with transitional rules TP 2.8AR and TP 2.8CR, the following provisions of COB will continue to apply to a firm carrying out the activities set out in TP 2.8AR that decides to comply with COBS before 1 May 2008:

(1) COB 2.4 (Chinese walls);

(2) COB 5.10 (Corporate finance business issues); and

(3) COB 7.1 (Conflicts of interest and material interest)

From 1 November 2007 to 30 April 2008

1 November 2007

42.8E

COBS 18

R

A decision by a firm carrying out activities set out in TP 2.8AR to comply with COBS before 1 May 2008 must be made in relation to all the COBS provisions applicable to it. The firm may not 'cherry pick'.

From 1 November 2007 to 30 April 2008

1 November 2007

2.9

COBS 20.2.1 G – COBS 20.2.41 G; COBS 20.2.53 R – COBS 20.2.60 G (Treating with-profits policyholders fairly)

R

The provisions listed in column (2) do not apply to a firm if, and to the extent that, they are inconsistent with an arrangement that was formally approved by the FSA, a previous regulator or a court of competent jurisdiction, on or before 20 January 2005.

From 1 November 2007 indefinitely

1 November 2007

2.10

COBS 20.2.42R (3) (Policyholder advocate: appointment and role)

R

The provision listed in column (2) does not apply to a firm if it is already carrying out a reattribution and the process is substantially underway to the extent that it has on or before 31 October 2007 appointed a policyholder advocate.

From 1 November 2007 – until completion of the firm's reattribution

1 November 2007

2.11

COBS TP 2.9

G

The rules and guidance on treating with-profits policyholders fairly (COBS 20.2.1 G – COBS 20.2.41 G; COBS 20.2.53 R – COBS 20.2.60 G) may be contrary to, or inconsistent with, some arrangements that were formally approved by the FSA, a previous regulator or a court of competent jurisdiction, on or before 20 January 2005. The effect of TP 2.9 is that these rules do not apply to such arrangements if, and to the extent that, it is inconsistent with them.

A firm should be mindful, however, that, even if some or all of these rules are disapplied, the firm is still subject to the rules in the rest of the Handbook, including Principle 6.

From 1 November 2007 indefinitely

1 November 2007

42.12

COBS

R

COB 2.4 (Chinese walls) and COB 7.1 (Conflicts of interest) as they were in force on 31 October 2007 continue to apply to designated investment business carried on by a firm which is not MiFID or equivalent third country business.

From 1 November 2007 indefinitely

1 November 2007

42.13

COBS

R

COB 5.10 (Corporate finance business issues) as it was in force on 31 October 2007 continues to apply to corporate finance business carried on by a firm which is not MiFID or equivalent third country business.

From 1 November 2007 indefinitely

1 November 2007