Related provisions for COBS 4.10.9

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COBS 4.10.1GRP
The rules in SYSC 3 and SYSC 4 require a firm that communicates with a client in relation to designated investment business, or communicates or approves a financial promotion, to put in place systems and controls or policies and procedures in order to comply with the rules in this chapter.
COBS 4.10.2RRP
(1) Before a firmapproves a financial promotion for communication by an unauthorised person, it must confirm that the financial promotion complies with the financial promotion rules.(2) If, at any time after a firm has complied with (1), a firm becomes aware that a financial promotion no longer complies with the financial promotion rules, it must withdraw its approval and notify any person that it knows to be relying on its approval as soon as reasonably practicable.(3) When approving
COBS 4.10.3GRP
(1) Section 21(1) of the Act (Restrictions on financial promotion) prohibits an unauthorised person from communicating a financial promotion, in the course of business, unless an exemption applies or the financial promotion is approved by a firm. Many of the rules in this chapter apply when a firmapproves a financial promotion in the same way as when a firmcommunicates a financial promotion itself.(2) A firm may also wish to approve a financial promotion that it communicates itself.
COBS 4.10.4RRP
A firm must not approve a financial promotion to be made in the course of a personal visit, telephone conversation or other interactive dialogue.
COBS 4.10.5RRP
If a firmapproves a financial promotion in circumstances in which one or more of the financial promotion rules, or the prohibition on approval of promotions for collective investment schemes in section 240(1) of the Act (Restriction on approval), are expressly disapplied, the approval must be given on terms that it is limited to those circumstances.
COBS 4.10.6GRP
For example, if a firmapproves a financial promotion for communication to a professional client or an eligible counterparty, the approval must be limited to communication to such persons.
COBS 4.10.7GRP
If an approval is limited, and an unauthorised personcommunicates the financial promotion to persons not covered by the approval, the unauthorised person may commit an offence under the restriction on financial promotion in the Act (section 21). A firm giving a limited approval may wish to notify the unauthorised person accordingly.
COBS 4.10.8GRP
If a firm continues to communicate a financial promotion when the financial promotion no longer complies with the rules in this chapter, it will breach those rules.
COBS 4.10.11GRP
A firm should inform anyone relying on its confirmation of compliance if it becomes aware that the financial promotion no longer complies with the rules in this chapter.
COBS 4.1.1RRP
1This chapter applies to a firm:(1) communicating with a client in relation to its designated investment business;(2) communicating or approving a financial promotion other than:(a) a financial promotion of qualifying credit, a home purchase plan or a home reversion plan; or(b) a financial promotion in respect of a non-investment insurance contract; or(c) a promotion of an unregulated collective investment scheme that would breach section 238(1) of the Act if made by an authorised
COBS 4.1.2GRP
(1) 4This chapter applies in relation to an authorised professional firm in accordance with COBS 18 (Specialist regimes).(2) This chapter applies, to a limited extent, in relation to communicating or approving a financial promotion that relates to a deposit if the deposit is a structured deposit, cash deposit ISA or cash deposit CTF.
COBS 4.1.3GRP
A firm is required to comply with the financial promotion rules in relation to a financial promotioncommunicated by its appointed representative even where the financial promotion does not require approval because of the exemption in article 16 of the Financial Promotion Order (Exempt persons).[Note: see section 39 of the Act]
COBS 4.1.4GRP
(1) In COBS 4.3.1 R, COBS 4.5.8 R and COBS 4.7.1 R, the defined terms "financial promotion" and "direct offer financial promotion" include, in relation to MiFID or equivalent third country business, all communications that are marketing communications within the meaning of MiFID.(2) In the case of MiFID or equivalent third country business, certain requirements in this chapter are subject to an exemption for the communication of a third party prospectus in certain circumstances.
COBS 4.1.6GRP
Approving a financial promotion without communicating it (which includes causing it to be communicated)3 is not MiFID or equivalent third country business. Communicating a financial promotion to a person, such as a corporate finance contact or a venture capital contact, who is not a client within the meaning of COBS 3.2.1 R (1), COBS 3.2.1 R (2) or COBS 3.2.1 R (4) in respect of the MiFID or equivalent third country business to which the financial promotion relates,3 is also not
COBS 4.1.8RRP
(1) In relation to communications by a firm to a client in relation to its designated investment business this chapter applies in accordance with the general application rule and the rule on business with UKclients from an overseas establishment (COBS 1 Annex 1 Part 2 paragraph 2.1R).(2) In addition, the financial promotion rules apply to a firm in relation to:(a) the communication of a financial promotion to a person inside the United Kingdom;(b) the communication of a cold call
COBS 4.1.9GRP
(1) The EEA territorial scope rule modifies the general territorial scope of the rules in this chapter to the extent necessary to be compatible with European law. This means that in a number of cases, the rules in this chapter will apply to communications made by UK firms to persons located outside the United Kingdom and will not apply to communications made to persons inside the United Kingdom by EEA firms. Further guidance on this is located in COBS 1 Annex 1.(2) One effect
COBS 2.3.15GRP

1This table belongs to COBS 2.3.14 G.

Reasonable non-monetary benefits

Gifts, Hospitality and Promotional Competition Prizes

1

A retail investment product provider5 giving and a firm receiving gifts, hospitality and promotional competition prizes of a reasonable value.

5

Promotion

2

A retail investment product provider5 assisting another firm to promote its retail investment products5 so that the quality of its service to clients is enhanced. Such assistance should not be of a kind or value that is likely to impair the recipient firm's ability to pay due regard to the interests of its clients, and to give advice on, and recommend, retail investment products5 available from the recipient firm's whole range or ranges.

555

Joint marketing exercises

3

A retail investment product provider5 providing generic product literature (that is, letter heading, leaflets, forms and envelopes) that is suitable for use and distribution by or on behalf of another firm if:

5

(a)

the literature enhances the quality of the service to the client and is not primarily of promotional benefit to the retail investment product provider;5 and

5

(b)

the total costs (for example, packaging, posting, mailing lists) of distributing such literature to its client are borne by the recipient firm.

4

A retail investment product provider5 supplying another firm with 'freepost' envelopes, for forwarding such items as completed applications, medical reports or copy client agreements.

5

5

A retail investment product provider5 supplying product specific literature (for example, key features documents, minimum information) to another firm if:

5

(a)

the literature does not contain the name of any other firm; or

(b)

if the name of the recipient firm is included, the literature enhances the quality of the service to the client and is not primarily of promotional benefit to the recipient firm.

6

A retail investment product provider5 supplying draft articles, news items and financial promotions for publication in another firm's magazine, only if in each case any costs paid by the product provider for placing the articles and financial promotions are not more than market rate, and exclude distribution costs.

5

Seminars and conferences

7

A retail investment product provider5 taking part in a seminar organised by another firm or a third party and paying toward the cost of the seminar, if:

5

(a)

its participation is for a genuine business purpose; and

(b)

the contribution is reasonable and proportionate to its participation and by reference to the time and sessions at the seminar when its staff play an active role.

Technical services and information technology

8

A retail investment product provider5 supplying a 'freephone' link to which it is connected.

5

9

A retail investment product provider5 supplying another firm with any of the following:

5

(a)

quotations and projections relating to its retail investment products5 and, in relation to specific investment transactions (or for the purpose of any scheme for review of past business), advice on the completion of forms or other documents;

5

(b)

access to data processing facilities, or access to data, that is related to the retail investment product provider’s5 business;

5

(c)

access to third party electronic dealing or quotation systems that are related to the retail investment product provider's5 business; and

5

(d)

software that gives information about the retail investment product provider's retail investment products5 or which is appropriate to its business (for example, for use in a scheme for review of past business or for producing projections or technical product information).

5

10

A retail investment product provider5 paying cash amounts or giving other assistance to a firm not in the same immediate group for the development of software or other computer facilities necessary to operate software supplied by the retail investment product provider,5 but only to the extent that by doing so it will generate equivalent cost savings to itself or clients.

55

11

A retail investment product provider5 supplying another firm with information about sources of mortgage finance.

5

12

A retail investment product provider5 supplying another firm with generic technical information in writing, not necessarily related to the product provider's business, when this information states clearly and prominently that it is produced by the product provider or (if different) supplying firm.

5

Training

13

A retail investment product provider5 providing another firm with training facilities of any kind (for example, lectures, venue, written material and software).

5

Travel and accommodation expenses

14

A retail investment product provider5 reimbursing another firm's reasonable travel and accommodation expenses when the other firm:

5

(a)

participates in market research conducted by or for the retail investment product provider;5

5

(b)

attends an annual national event of a United Kingdom trade association, hosted or co-hosted by the retail investment product provider;5

5

(c)

participates in the retail investment product provider’s5 training facilities (see 13);

5

(d)

visits the retail investment product provider’s5United Kingdom office in order to:

5

(i)

receive information about the retail investment product provider's5 administrative systems; or

5

(ii)

attend a meeting with the retail investment product provider5 and an existing or prospective client of the receiving firm.

5
COBS 4.6.1RRP
(1) Subject to (2) and (3), this section applies to a firm in relation to:1(a) 1the provision of information in relation to its MiFID or equivalent third country business;222(b) the communication or approval of a financial promotion;1where such information or financial promotion is addressed to, or disseminated in such a way that it is likely to be received by, a retail client.1(2) If3 a communication relates to a firm'sMiFID or equivalent third country business, this section
COBS 4.6.4GRP
If a financial promotion includes information referring to the past performance of a packaged product that is not a financial instrument2, a firm will comply with the rule on appropriate performance information (COBS 4.6.2R (2)) if the financial promotion includes, in the case of a scheme, unit-linked life policy, unit-linked personal pension scheme or unit-linked stakeholder pension scheme (other than a unitised with-profits life policy or stakeholder pension scheme) past performance
COBS 4.6.7RRP
(1) A firm must ensure that information that contains an indication of future performance of relevant business, a relevant investment, a structured deposit or a financial index, satisfies the following conditions:(a) it is not based on and does not refer to simulated past performance;(b) it is based on reasonable assumptions supported by objective data;(c) it discloses the effect of commissions, fees or other charges if the indication is based on gross performance; and(d) it contains
COBS 4.5.1RRP
(1) Subject to (2) and (3), this section applies to a firm in relation to:(a) the provision of information in relation to its designated investment business; and(b) the communication or approval of a financial promotion;where such information or financial promotion is addressed to, or disseminated in such a way that it is likely to be received by, a retail client.(2) If3 a communication relates to a firm's3MiFID or equivalent third country business, this section does not apply:3(a)
COBS 4.5.7RRP
(1) If any information refers to a particular tax treatment, a firm must ensure that it prominently states that the tax treatment depends on the individual circumstances of each client and may be subject to change in future.[Note: article 27(7) of the MiFID implementing Directive](2) This rule applies in relation to MiFID or equivalent third country business or, otherwise, to a financial promotionfinancial promotion. However, it does not apply to a financial promotion to the extent
COBS 4.5.8RRP
(1) A firm must ensure that information contained in a financial promotion is consistent with any information the firm provides to a retail client in the course of carrying on designated investment business or, in the case of MiFID or equivalent third country business, ancillary services.[Note: article 29(7) of the MiFID implementing Directive](2) This rule does not apply to a financial promotion to the extent that it relates to:(a) [deleted]22(b) a pure protection contract that
COBS 4.2.1RRP
(1) A firm must ensure that a communication or a financial promotion is fair, clear and not misleading.(2) This rule applies in relation to:(a) a communication by the firm to a client in relation to designated investment business other than a third party prospectus;(b) a financial promotioncommunicated by the firm that is not:(i) an excluded communication;(ii) a non-retail communication;(iii) a third party prospectus; and(c) a financial promotion approved by the firm.[Note: article
COBS 4.2.4GRP
A firm should ensure that a financial promotion:(1) for a product or service that places a client's capital at risk makes this clear;(2) that quotes a yield figure gives a balanced impression of both the short and long term prospects for the investment;(3) that promotes an investment or service whose charging structure is complex, or in relation to which the firm will receive more than one element of remuneration, includes the information necessary to ensure that it is fair, clear
COBS 4.2.5GRP
2A communication or a financial promotion should not describe a feature of a product or service as “guaranteed”, “protected” or “secure”, or use a similar term unless:24(1) that term is capable of being a fair, clear and not misleading description of it; and(2) the firm communicates all of the information necessary, and presents that information with sufficient clarity and prominence, to make the use of that term fair, clear and not misleading.4
COBS 4.2.6RRP
1If, in relation to a particular communication or financial promotion, a firm takes reasonable steps to ensure it complies with the fair, clear and not misleading rule, a contravention of that rule does not give rise to a right of action under section 150 of the Act.
COBS 19.2.1GRP
A financial promotion for1 a 1FSAVC should contain a prominent warning that, as an alternative1 an AVC arrangement 1exists, and that details can be obtained from the scheme administrator (if that is the case).1
COBS 19.2.3RRP
When a firm promotes a personal pension scheme, including a group personal pension scheme, to a group of employees it must:(1) be satisfied on reasonable grounds that the scheme is likely to be at least as suitable for the majority of the employees as a stakeholder pension scheme; and(2) record why it thinks the promotion is justified.
COBS 4.9.5RRP
A financial promotion for an overseas long-term insurer, which has no establishment in the United Kingdom, must include:(1) the full name of the overseas long-term insurer, the country where it is registered, and, if different, the country where its head office is situated;(2) a prominent statement that 'holders of policies issued by the company will not be protected by the Financial Services Compensation Scheme if the company becomes unable to meet its liabilities to them'; and(3)
COBS 4.9.6RRP
A financial promotion for an overseas long-term insurer which is authorised to carry on long-term insurance business in any country or territory listed in paragraph (c) of the Glossary definition of overseas long-term insurer must also include:(1) the full name of any trustee of property of any description which is retained by the overseas long-term insurer in respect of the promoted contracts;(2) an indication whether the investment of such property (or any part of it) is managed
COBS 4.9.7RRP
If a financial promotion relates to a life policy with an overseas long-term insurer but does not name the overseas long-term insurer by giving its full name or its business name:(1) it must include the following prominent statement: "This financial promotion relates to an insurance company which does not, and is not authorised to, carry on in any part of the United Kingdom the class of insurance business to which this promotion relates. This means that the management and solvency
COBS 18.11.1RRP
1COBS applies to an authorised professional firm, except that its application in relation to non-mainstream regulated activities and financial promotion is modified as set out below.
COBS 18.11.2RRP
COBS does not apply to an authorised professional firm with respect to its non-mainstream regulated activities, except that:(1) the fair, clear and not misleading rule applies;(2) the financial promotion rules apply as modified below;(3) COBS 7 (Insurance mediation) applies but only if the designated professional body of the firm does not have rules approved by the FSA under section 332(5) of the Act that implement articles 12 and 13 of the Insurance Mediation Directive and that
COBS 18.11.3RRP
The financial promotion rules do not apply to an authorised professional firm in relation to the communication of a financial promotion if:(1) the firm's main business is the practice of its profession (see IPRU(INV) 2.1.2R(3));(2) the financial promotion is made for the purposes of and incidental to the promotion or provision by the firm of its professional services or its non-mainstream regulated activities; and(3) the financial promotion is not communicated on behalf of another
COBS 18.11.4GRP
The rules on approvingfinancial promotions continue to apply.
COBS 18.6.3GRP
Firms are reminded that syndicate business plans may be used in ways that bring them within the definition of a financial promotion.
COBS 4.11.1RRP
(1) A firm must make an adequate record of any financial promotion it communicates or approves, other than a financial promotion made in the course of a personal visit, telephone conversation or other interactive dialogue.(2) For a telemarketing campaign, a firm must make an adequate record of copies of any scripts used.(3) A firm must retain the record in relation to a financial promotion relating to:(a) a pension transfer, pension opt-out or FSAVC, indefinitely;(b) a life policy,
COBS 4.11.2GRP
A firm should consider maintaining a record of why it is satisfied that the financial promotion complies with the financial promotion rules.
COBS 4.11.3GRP
If the financial promotion includes market information that is updated continuously in line with the relevant market, the record-keeping rules do not require a firm to record that information.
COBS 12.3.3RRP
The financial promotion rules apply to non-independent research as though it were a marketing communication. [Note: article 24(2) of the MiFID implementing Directive]
COBS 3.2.1RRP
(1) A person to whom a firm provides, intends to provide or has provided:(a) a service in the course of carrying on a regulated activity; or(b) in the case of MiFID or equivalent third country business, an ancillary service,is a "client" of that firm;(2) A "client" includes a potential client.(3) In relation to the financial promotion rules, a person to whom a financial promotion is or is likely to be communicated is a "client" of a firm that communicates or approves it.(4) A
COBS 3.2.2GRP
1(1) A corporate finance contact or a venture capital contact is not a client under the first limb of the general definition. This is because a firm does not provide a service to such a contact. However, it will be a client under the third limb of the general definition for the purposes of the financial promotion rules if the firmcommunicates or approves a financial promotion that is or is likely to be communicated to such a contact. 1(2) Communicating or approving a financial
COBS 4.13.1RRP
(1) 1This section applies to a firm in relation to a communication to a client, including an excluded communication, that is a marketing communication within the meaning of the UCITS Directive.(2) This section does not apply to:(a) image advertising; or(b) the instrument constituting the scheme, the prospectus, the key investor information (or alternatively the simplified prospectus or EEA simplified prospectus) or the periodic reports and accounts of either a UCITS scheme or
COBS 18.9.1RRP
12(1) The financial promotion rules in COBS apply to an ICVC, except that COBS 4.13 (UCITS) applies only to an ICVC that is a UCITS scheme.2(2) COBS 14.2 (Providing product information to clients) applies to an ICVC that is a UCITS scheme.2
COBS 18.10.1RRP

1The COBS provisions in the table apply to a UCITS qualifier and a service company:

COBS

Description

4

Communications to clients, but only in relation to communicating or approving a financial promotion

5.2

E-Commerce

12.4

Investment Research recommendations: required disclosures
COBS 4.3.1RRP
(1) A firm must ensure that a financial promotion addressed to a client is clearly identifiable as such.[Note: article 19(2) of MiFID and article 77 of the UCITS Directive]3(2) If2 a financial promotion relates to a2firm'sMiFID or equivalent third country business, this rule does not apply to the extent that the2financial promotion is a third party prospectus.2(3) If2 a financial promotion relates2 to a 2 firm's business that is not 2MiFID or equivalent third country business,