1. (1)

   The main purpose of this chapter is to implement the provisions of the E-Commerce Directive as these apply to firms regulated by the FSA.

2. (2)

   The purpose of ECO 2.2 (Modification of the content and territorial scope of COB) is to ensure that:

   1. (a)

      an outgoing ECA provider; and1

   2. (b)

      a firm, in relation to a financial promotion which is an outgoing electronic commerce communication1;

   in complying with COB, is able to disregard any provision of COB which is included in the 'consumer contract derogation' or 'insurance derogation' (set out in the Annex to the E-Commerce Directive), when dealing with a consumer in another EEA State.

3. (3)

   ECO 2.2 also extends the territorial scope of COB 3 (Financial promotion) and MCOB 3 (Financial promotion) in relation to a financial promotion which is an outgoing electronic commerce communication1, whether or not the recipient is a consumer.2

4. (4)

   ECO 2.3 (Minimum information requirements) imposes the information requirements of the E-Commerce Directive on firms when they carry on an electronic commerce activity with an EEA ECA recipient from a UK establishment, whether or not the recipient is a consumer. These requirements are in addition to the requirements otherwise applicable to firms when they carry on a regulated activity.1

The provisions mentioned in ECO 1.2.6 E (1)(a) and ECO 1.2.6 E (1)(c) and ECO 1.3.3 R are those that the United Kingdom, as a Host State, applies to incoming ECA providers under the 'consumer contract derogation' and 'insurance derogation' respectively. A corollary of this approach is that these provisions are disapplied to:

1. (1)

   an outgoing ECA provider when it provides electronic commerce activities to an EEA ECA recipient who is a consumer; and1

2. (2)

   1a firm, in relation to a financial promotion which is an outgoing electronic commerce communication made to or directed at a consumer;

The provisions at ECO 1.2.6 E, ECO 1.2.6 E (1)(b) and ECO 1.2.6 E (1)(d) do not apply in these situations1 in any event.1

The effect of ECO 2.2.3 R is to apply the whole of COB 3 and MCOB 3, where relevant, to outgoing electronic commerce communications1, except those provisions of COB 3 and MCOB 3, identified in ECO 2.2.1 R. (See ECO 2.2.2 G for an explanation of this approach.)2

ECO 3 Annex 1 R implements provisions contained in the E-Commerce Directive, as follows:

1. (1)

   ECO 3 Annex 1 R(1) implements articles 5 (except paragraph 1(f)), 6 and 10 of the directive; these provisions require certain information to be provided by an outgoing ECA provider before any contract is entered into;

2. (2)

   ECO 3 Annex 1 R(2) implements article 11 of the directive, which relates to matters arising after the contract has been entered into; and

3. (3)

   ECO 3 Annex 1 R(3) implements article 5.1(f) of the directive; these requirements apply where the outgoing ECA provider is a professional firm (or a person that is regulated by the equivalent of a designated professional body in an EEA State other than the United Kingdom); this Annex will therefore mainly be relevant to firms which are solicitors, accountants, or actuaries.