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  1. Point in time
    2005-02-14

SIFA 9.12 Excessive charges

SIFA 9.12.1G

A firm must ensure that the charges it makes to a private customer, in the course of or in connection with designated investment business are not excessive. This is in line with Principle 6 (Customer's interests) which requires you to pay due regard to the interests of your customers and treat them fairly.

How do you ensure that you do not charge customers excessively?

SIFA 9.12.2G

COB 5.6.4 G says that you should consider the following to determine whether a charge is excessive:

  1. (1)

    how your charges for products or services compare to similar ones in the market;

  2. (2)

    to what extent the charges made are an abuse of the trust that your customer has placed in your firm; and

  3. (3)

    the nature and extent of the disclosure of the charges to your private customers.

Where are the relevant sections in the Handbook?

SIFA 9.12.3G

The following sections of the Handbook are relevant:

  1. (1)

    The general requirements: Section 5.6 of COB.

  2. (2)

    There is a special provision for charges in respect of designated investments that are not readily realisable ( COB 5.6.5 R).

  3. (3)

    Section 5.7 of COB deals with the disclosure of charges.

SIFA 9.12.4G

The following sections are also relevant:

•'Inducements' - Chapter 9.4 of this Overview;

•'Disclosing charges, remuneration and commission' - Chapter 9.13 of this Overview; and

•PRIN 2.1 in the Handbook