Related provisions for COBS 2.3.-1

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COBS 2.3.1RRP
A firm must not pay or accept any fee or commission, or provide or receive any non-monetary benefit, in relation to designated investment business or, in the case of its MiFID or equivalent third country business, another ancillary service, carried on for a client other than:(1) a fee, commission or non-monetary benefit paid or provided to or by the client or a person on behalf of the client; or(2) a fee, commission or non-monetary benefit paid or provided to or by a third party
COBS 2.3.6AGRP
5COBS 6.1A (Adviser charging and remuneration), COBS 6.1B (Retail investment product provider requirements relating to adviser charging and remuneration), COBS 6.1C (Consultancy charging and remuneration) and COBS 6.1D (Product provider requirements relating to consultancy charging and remuneration) set out specific requirements as to when it is acceptable for a firm to pay or receive commissions, fees or other benefits:6(1) relating to the provision of a personal recommendation
COBS 2.3.12ERP
(1) 1This evidential provision applies in relation to a holding in, or the provision of credit to, a firm which holds itself out as making personal recommendations to retail clients on retail investment products,5 except where the relevant transaction is between persons who are in the same immediate group.5(2) A retail investment product provider5 should not take any step which would result in it:5(a) having a direct or indirect holding of the capital or voting power of a firm
COBS 2.3.12AGRP
5Where a retail investment product provider, or its associate, provides credit to a retail client of a firm making personal recommendations in relation to retail investment products or giving advice, or providing services, to an employer in connection with a group personal pension scheme or group stakeholder pension scheme6, this may create an indirect benefit for the firm and, to the extent that this is relevant, the provider of retail investment products may need to consider
COBS 2.3.14GRP
(1) 1In relation to the sale of retail investment products,5 the table on reasonable non-monetary benefits (COBS 2.3.15 G) indicates the kind of benefits which are capable of enhancing the quality of the service provided to a client and, depending on the circumstances, are capable of being paid or received without breaching the client's best interests rule. However, in each case, it will be a question of fact whether these conditions are satisfied. 5(2) The guidance in the table
COBS 2.3.16AGRP
5In interpreting the table of reasonable non-monetary benefits, a firm that provides a personal recommendation in relation to a retail investment product to a retail client or gives advice, or provides a service, to an employer in connection with a group personal pension scheme or a group stakeholder pension scheme6 should be aware that acceptance of benefits on which the firm will have to rely for a period of time is more likely to impair compliance with the client's best interests
COBS 19.4.2RRP
(1) If a retail client asks a firm for a retirement quotation more than four months before the client’s intended retirement date, the firm must give the client an open market option statement with or as part of its reply, unless the firm has given the client such a statement in the last 12 months.(2) If a firm does not receive such a request, it must provide a retail client with an open market option statement between four and six months before the client’s intended retirement
COBS 19.1.2RRP
A firm must: (1) compare the benefits likely (on reasonable assumptions) to be paid under a defined benefits pension scheme with the benefits afforded by a personal pension scheme or stakeholder pension scheme , before it advises a retail client to transfer out of a defined benefits pension scheme;(2) ensure that that comparison includes enough information for the client to be able to make an informed decision;(3) give the client a copy of the comparison, drawing the client's
COBS 19.1.3GRP
In particular, the comparison should: (1) take into account all of the retail client's relevant circumstances;(2) have regard to the benefits and options available under the ceding scheme and the effect of replacing them with the benefits and options under the proposed scheme; 3(3) explain the assumptions on which it is based and the rates of return that would have to be achieved to replicate the benefits being given up; and3(4) be illustrated on rates of return which take into
COBS 19.1.4RRP

When a firm compares the benefits likely to be paid under a defined benefits pension scheme with the benefits afforded by a personal pension scheme or stakeholder pension scheme (COBS 19.1.2R (1)), it must:

  1. (1)

    assume that:

    (a) the annuity interest rate is the intermediate rate of return appropriate for a level or fixed rate of increase annuity in 2COBS 13 Annex 2 3.1R(6)2 unless COBS 19.1.4B R applies3 or the rate for annuities in payment (if less);3

    44

    (b) the RPI4 is

    4

    2.5%

    (c) the average earnings index and the rate for section 21 orders is

    4.0%

    (d) for benefits linked to the RPI,4 the pre-retirement limited price indexation revaluation is

    2.5%

    (e) the annuity interest4 rate for3 post-retirement limited price indexation based on the RPI4 with maximum pension4 increases less than or equal to 3.5% or with minimum pension4 increases more than or equal to 3.5% is the rate in (a) above allowing for increases at the maximum rate of pension increase4; otherwise it is the rate in (f) below;3

    43    		 3

    (f) the index linked annuity interest4 rate for pension benefits linked to the RPI4 is the intermediate rate of return in 2COBS 13 Annex 2 3.1 R (6)2 for annuities linked to the RPI4 unless COBS 19.1.4B R applies;3

    44

    (g) the mortality rate used to determine the annuity is based on the year of birth rate derived from each of the Institute and Faculty of Actuaries’ Continuous Mortality Investigation tables PCMA00 and PCFA00 and including mortality improvements derived from each of the male and female annual mortality projections models, in equal parts;3

    4

    4(h) for benefits linked to the CPI, the pre-retirement limited price indexation revaluation is

    2.0%

    4(i) the index linked annuity interest rate for pension benefits linked to the CPI is the intermediate rate of return in COBS 13 Annex 2 3.1R(6) for annuities linked to the RPI plus 0.5% unless COBS 19.1.4B R applies in which case it is the annuity rate in COBS 19.1.4B R plus 0.5%;

    4(j) the annuity interest rate for post-retirement limited price indexation based on the CPI with maximum pension increases less than or equal to 3.0% or with minimum pension increases more than or equal to 3.5% is the rate in (a) above allowing for increases at the maximum rate of pension increase; where minimum pension increases are more than or equal to 3% but less than 3.5% the annuity rate is the rate in (a) above allowing for increases at the minimum rate of pension increase otherwise it is the rate in (i) above;

    or use more cautious assumptions;

  2. (2)

    calculate the interest rate in deferment; and

  3. (3)

    have regard to benefits which commence at difference times.

COBS 19.1.7AGRP
3When giving a personal recommendation about a pension transfer, a firm should clearly inform the retail client about the loss of the fixed benefits and the consequent transfer of risk from the defined benefits pension scheme to the retail client, including:(1) the extent to which benefits may fall short of replicating those in the defined benefits pension scheme ;(2) the uncertainty of the level of benefit that can be obtained from the purchase of a future annuity and the
COBS 19.2.2RRP
When a firm prepares a suitability report it must:(1) (in the case of a personal pension scheme), explain why it considers the personal pension scheme to be at least as suitable as a stakeholder pension scheme; and(2) (in the case of a personal pension scheme, stakeholder pension scheme or2FSAVC) explain why it considers the personal pension scheme, stakeholder pension scheme or2FSAVC to be at least as suitable as any facility to make additional contributions to an occupational
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 16.6.1RRP
3(1) This section applies to a long-term insurer, unless, at the time of application, the client, other than an EEA ECA recipient, was habitually resident:3(a) in an EEA State other than the United Kingdom; or(b) outside the EEA and he was not present in the United Kingdom.(2) In addition, COBS 16.6.8 R applies to an operator of a personal pension scheme or stakeholder pension scheme in relation to a retail client who elects to make income withdrawals.3
COBS 16.6.8RRP
1At intervals no longer than 12 months from the date of an election by a retail client to make income withdrawals, the relevant operator of a personal pension scheme or stakeholder pension scheme3must:3(1) provide the retail client with such information as is necessary for3 the retail client to review the election, including where relevant the information required by COBS 13 Annex 2 2.9R3; and3(2) inform the retail client how to obtain advice on investments in respect of his income
COBS 13.6.1RRP
1A firm that agrees to start facilitating the payment of an adviser charge or consultancy charge, or an increase in such a charge, from an in-force packaged product, must prepare sufficient information for the retail client to be able to understand the likely effect of that facilitation, in good time before that information has to be provided.
COBS 5.1.11GRP
In the FSA's view, other examples of:(1) 'initial service agreement' include:(a) subscribing to an investment trust savings scheme; or(b) concluding a life policy, personal pension scheme or stakeholder pension scheme that includes a pre-selected option providing for future increases or decreases in regular premiums or payments; and(2) 'operations' include:(a) successive purchases or sales of shares under an investment trust savings scheme; and(b) subsequent index-linked changes
COBS 13.4.2RRP
When the rules in this chapter require a key features illustration to be prepared, it must not take the form of a generic key features illustration:33(1) unless 3there are reasonable grounds for believing that it3 will be sufficient to enable a retail client to make an informed decision about whether to invest; or3(2) if it is part of a3direct offer financial promotion which contains a personal recommendation; or33(3) if a personal pension scheme or a stakeholder pension scheme
COBS 16.4.1RRP
(1) A firm that holds clientdesignated investments or client money for a client must send that client at least once a year a statement in a durable medium of those designated investments or that client money unless such a statement has been provided in a periodic statement.(2) A credit institution need not send a statement in respect of deposits held by it.(3) This rule does not apply in relation to a firm holding clientdesignated investments or client money under a personal pension
COBS 18.1.1RRP
(1) 1This section applies to the MiFID or equivalent third country business carried on by a trustee firm.(2) It does not apply to a trustee firm when acting as:(a) a depositary; or(b)R the trustee of a personal pension scheme or stakeholder pension scheme.
COBS 15.5.1RRP
In this chapter: (1) references to a consumer include the trustees of an occupational pension scheme and the trustees or operator of a personal pension scheme or stakeholder pension scheme; and(2) any contract with such persons is to be treated as a non-distance contract.
COBS 9.5.2RRP
A1firm must retain its records relating to suitability for a minimum of the following periods:(1) if relating to a pension transfer, pension opt-out or FSAVC, indefinitely;(2) if relating to a life policy,2personal pension scheme2or stakeholder pension scheme, five years;(3) if relating to MiFID or equivalent third country business, five years; and(4) in any other case, three years.
COBS 13.1.3RRP
A firm is not required to prepare:(1) a document, if another firm has agreed to prepare it; or(2) a key features document for:(a) a unit in a UCITS scheme or3 a simplified prospectus scheme; or(b) a unit in an EEA UCITS scheme which is a recognised scheme; or33(c) a unit in a key features scheme, if it prepares a simplified prospectus, or the information appears with due prominence in another document, instead; or(d) a stakeholder pension scheme, or personal pension scheme that
COBS 19.3.1RRP
(1) When a firm sells, personally recommends or arranges1 the payment of an AVC contribution by a member of an occupational pension scheme to be secured by a packaged product purchased by the scheme trustees, it must give the trustees sufficient information to pass to the relevant member for that member to be able to make informed comparisons between the AVC and any alternative personal pension schemes and stakeholder pension schemes available.1(2) This rule applies to an AVC