Related provisions for COBS 13.4.4
21 - 40 of 111 items.
A firm must make at least the following information easily, directly and permanently accessible to the recipients of the information society services it provides:(1) its name;(2) the geographic address at which it is established;(3) the details of the firm, including its e-mail address, which allow it to be contacted rapidly and communicated with in a direct and effective manner;(4) an appropriate statutory status disclosure statement (GEN 4 Annex 1 R or GEN 4 Annex 1A R as appropriate4),
A firm must ensure that commercial communications which are part of, or constitute, an information society service, comply with the following conditions:(1) the commercial communication must be clearly identifiable as such;(2) the person on whose behalf the commercial communication is made must be clearly identifiable;(3) promotional offers must be clearly identifiable as such, and the conditions that must be met to qualify for them must be easily accessible and presented clearly
A firm must (except when otherwise agreed by parties who are not consumers):(1) give an ECA recipient at least the following information, clearly, comprehensibly and unambiguously, and prior to the order being placed by the recipient of the service:(a) the different technical steps to follow to conclude the contract;(b) whether or not the concluded contract will be filed by the firm and whether it will be accessible;(c) the technical means for identifying and correcting input
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
If during the term of a life policy entered into on or after 1 July 1994 there is any proposed change in the information referred to in paragraphs (1) to (12) of the Consolidated Life Directive information (COBS 13 Annex 1) the long-term insurer must inform the policyholder of the effect of the change before the change is made. [Note: article 36(2) of the Consolidated Life Directive]
If a life policy entered into on or after 1 July 1994 provides for the payment of bonuses and the amounts of bonuses are unspecified, the long-term insurer must, in every calendar year except the first, either:(1) notify the policyholder in writing of the amount of any bonus which has become payable under the contract, and which has not previously been notified under this rule; or(2) give the policyholder in writing sufficient information to enable him to determine the amount
(1) When a firm provides information in accordance with this section, it must provide the information in a durable medium, unless (2) applies.(2) If the contract is being made by telephone, the firm may give the information orally to the customer. If the customer enters into the contract, a written version of the required information must be sent to the customer within five business days of the contract being entered into.
1At each anniversary of the date on which a long-term care insurance contract which is based on single premium investment bonds was entered into, the insurer must:(1) provide the retail client with a table based on the format of COBS 13 Annex 3 2.2R containing at least the current fund value and projected future policy values (as in column "What you might get back"); (2) where it is the case, inform the retail client of the possibility that future policy values may be insufficient
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
(1) 1This section applies to a firm that carries on designated investment business for:(a) a retail client; and(b) in the case of MiFID or equivalent third country business, a client.(2) If expressly provided, this section also applies to ancillary services not covered by (1), but only in the course of MiFID or equivalent third country business carried on with or for a client.
A firm must provide a retail client with the following general information, if relevant:(1) the name and address of the firm, and the contact details necessary to enable a client to communicate effectively with the firm;(2) in the case of MiFID or equivalent third country business, the languages in which the client may communicate with the firm, and receive documents and other information from the firm;(3) the methods of communication to be used between the firm and the client
(1) A firm that manages investments for a client must establish an appropriate method of evaluation and comparison such as a meaningful benchmark, based on the investment objectives of the client and the types of designated investments included in the client portfolio, so as to enable the client to assess the firm's performance.(2) If a firm proposes to manage investments for a retail client, the firm must provide the client with such of the following information as is applicable:(a)
(1) A firm that holds designated investments or client money for a retail client subject to the custody chapter or the client money chapter must provide that client with the following information:444(a) if applicable,(i) that the designated investments or client money of that client may be held by a third party on behalf of the firm;(ii) the responsibility of the firm under the applicable national law for any acts or omissions of the third party; and(iii) the consequences for
A firm must provide a retail client with information on costs and associated charges including, if applicable:(1) the total price to be paid by the client in connection with the designated investment or the designated investment business or ancillary services, including all related fees, commissions, charges and expenses, and all taxes payable via the firm or, if an exact price cannot be indicated, the basis for the calculation of the total price so that the client can verify
(1) A firm must provide a client with the information required by this section in good time before the provision of designated investment business or ancillary services unless otherwise provided by this rule.(2) A firm may instead provide that information immediately after starting to provide designated investment business or ancillary services if:(a) the firm was unable to comply with (1) because, at the request of the client, the agreement was concluded using a means of distance
(1) A firm must notify a client in good time about any material change to the information provided under this section which is relevant to a service that the firm is providing to that client.(2) A firm must provide this notification in a durable medium if the information to which it relates was given in a durable medium. [Note: article 29(6) of the MiFID implementing Directive]
(1) A firm need not treat each of several transactions in respect of the same type of financial instrument as a new or different service and so does not need to comply with the disclosure rules in this chapter in relation to each transaction. [Note: recital 50 to the MiFID implementing Directive](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 disclosed
(1) A firm carrying on MiFID business must make available to a client, who has used or intends to use those services, information necessary for the identification of the compensation scheme or any other investor-compensation scheme of which the firm is a member (including, if relevant, membership through a branch) or any alternative arrangement provided for in accordance with the Investor Compensation Directive.(2) The information under (1) must include the amount and scope of
This section applies to a firm which produces, or arranges for the
production of, investment research that
is intended or likely to be subsequently disseminated to clients of
the firm or to the public, under
its own responsibility or that of a member of its group. [Note: article 25(1) of the MiFID
implementing Directive]
A firm must
ensure the implementation of all of the measures for managing conflicts of
interest in SYSC 10.1.11 R in relation to the financial
analysts involved in the production of investment
research and other relevant
persons whose responsibilities or business interests may conflict
with the interests of the persons to
whom investment research is
disseminated. [Note: article 25 (1) of the MiFID
implementing Directive]
Persons whose
responsibilities or business interests may reasonably be considered to conflict
with the interests of the persons to
whom investment research is
disseminated include corporate finance personnel and persons involved
in sales and trading on behalf of clients or
the firm. [Note: recital 30 of the MiFID
implementing Directive]
A firm must
have in place arrangements designed to ensure that the following conditions
are satisfied:(1) if a financial
analyst or other relevant person has
knowledge of the likely timing or content of investment
research which is not publicly available or available to clients and cannot readily be inferred from
information that is so available, that financial
analyst or other relevant person must
not undertake personal transactions
or trade on behalf of any other person,
including
Knowledge by a financial
analyst or other relevant person that
the firm intends to produce
or disseminate investment research to
its clients or to the public
(including in circumstances where research material has not yet been written)
could constitute knowledge of the likely timing and content of investment research under COBS 12.2.5 R (1).
For the purposes of COBS 12.2.5 R (2):(1) current recommendations should
be considered to be those recommendations contained in investment
research which have not been withdrawn and which have not lapsed;
and[Note: recital
34 of the MiFID implementing Directive](2) exceptional circumstances in which financial analysts and other relevant persons may, with prior written
approval, undertake personal transactions
in financial instruments to
which investment research relates
should
Small gifts or minor hospitality
below a level specified in the firm'sconflicts of interest policy and mentioned
in the description of that policy that is made available to clients in
accordance with COBS 6.1.4 R (8) should not be considered as inducements for the
purposes of COBS 12.2.5 R (3). [Note: recital 32 of the MiFID
implementing Directive]
A financial
analyst should not become involved in activities other than
the preparation of investment research where
such involvement is inconsistent with the maintenance of the financial analysts objectivity. The following
should ordinarily be considered as inconsistent with the maintenance of a financial analyst's objectivity:(1) participating in investment banking
activities such as corporate finance business and underwriting; or(2) participating in 'pitches' for
new business
A firm which
disseminates investment research produced
by another person to the public
or to clients is exempt from
complying with the requirements in COBS 12.2.3 R and COBS 12.2.5 R if
the following criteria are met:(1) the person that
produces the investment research is
not a member of the group to
which the firm belongs;(2) the firm does
not substantially alter the recommendations within the investment
research;(3) the firm does
not present the investment research as
having
The FCA would expect a firm'sconflicts of interest policy to provide
for investment research to be
published or distributed to its clients in
an appropriate manner. For example, the FCA considers it will be:(1) appropriate for a firm to take reasonable steps to ensure that
its investment research is published
or distributed only through its usual distribution
channels; and(2) inappropriate for an employee (whether or not a financial
analyst) to communicate the substance of any
The FCA would expect a firm to
consider whether or not other business activities of the firm could
create the reasonable perception that its investment
research may not be an impartial analysis of the market in,
or the value or prospects of, a financial
instrument. A firm would
therefore be expected to consider whether its conflicts
of interest policy should contain any restrictions on the timing
of the publication of investment research.
For example, a firm might consider
whether
The FCA considers that the significant
conflicts of interest which could arise are likely to mean it is inappropriate
for a financial analyst or
other relevant person to prepare investment research which is intended firstly
for internal use for the firm's
own advantage, and then for later publication to its clients (in
circumstances in which it might reasonably be expected to have a material
influence on its clients' investment
decisions).
(1) A firm (other than a management company providing collective portfolio management services)1 which is authorised to execute orders on behalf of clients must implement procedures and arrangements which provide for the prompt, fair and expeditious execution of client orders, relative to other orders or the trading interests of the firm.[Note: paragraph 1 of article 22(1) of MiFID](2) These procedures or arrangements must allow for the execution of otherwise comparable orders
A firm must satisfy the following conditions when carrying out client orders:(1) it must ensure that orders executed on behalf of clients are promptly and accurately recorded and allocated;(2) it must carry out otherwise comparable orders sequentially and promptly unless the characteristics of the order or prevailing market conditions make this impracticable, or the interests of the client require otherwise; and(3) it must inform a retail client about any material difficulty relevant
Where a firm is responsible for overseeing or arranging the settlement of an executed order or executes the order itself in the course of providing collective portfolio management services,1 it must take all reasonable steps to ensure that any clientfinancial instruments or client funds received in settlement of that executed order are promptly and correctly delivered to the account of the appropriate client. [Note: article 47(2) of the MiFID implementing Directive,1 article 19(1)
A firm must not misuse information relating to pending client orders, and shall take all reasonable steps to prevent the misuse of such information by any of its relevant persons. [Note: article 47(3) of the MiFID implementing Directive,1 article 19(1) of MiFID and article 27(2) of the UCITS implementing Directive]1
Without prejudice to the Market Abuse Directive, for the purposes of the rule on the misuse of information (see COBS 11.3.5 R), any use by a firm of information relating to a pending client order in order to deal on own account in the financial instruments to which the client order relates, or in related financial instruments, should be considered a misuse of that information. However, the mere fact that market makers or bodies authorised to act as counterparties confine themselves
A firm is not permitted to carry out a client order or a transaction for own account in aggregation with another client order unless the following conditions are met:(1) it must be unlikely that the aggregation of orders and transactions will work overall to the disadvantage of any client whose order is to be aggregated;(2) it must be disclosed to each client whose order is to be aggregated that the effect of aggregation may work to its disadvantage in relation to a particular
If a firm aggregates a client order with one or more other orders and the aggregated order is partially executed, it must allocate the related trades in accordance with its order allocation policy. [Note: article 48(2) of the MiFID implementing Directive,1 article 19(1) of MiFID and article 28(2) of the UCITS implementing Directive]1
A firm which has aggregated transactions for own account with one or more client orders must not allocate the related trades in a way which is detrimental to a client.[Note: article 49(1) of the MiFID implementing Directive,1 article 19(1) of MiFID and article 28(3) of the UCITS implementing Directive]1
(1) If a firm aggregates a client order with a transaction for own account and the aggregated order is partially executed, it must allocate the related trades to the client in priority to the firm.(2) However, if the firm is able to demonstrate on reasonable grounds that without the combination it would not have been able to carry out the order on such advantageous terms, or at all, it may allocate the transaction for own account proportionally, in accordance with its order allocation
A firm must, as part of its order allocation policy, put in place procedures to prevent the reallocation, in a way that is detrimental to the client, of transactions for own account which are executed in combination with client orders. [Note: article 49(3) of the MiFID implementing Directive and article 19(1) of MiFID]
In this section, carrying out client orders includes:(1) the execution of orders on behalf of clients;(2) the placing of orders with other entities for execution that result from decisions to deal in financial instruments on behalf of clients when providing the service of portfolio management or collective portfolio management;1(3) the transmission of client orders to other entities for execution when providing the service of reception and transmission of orders.
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
(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.
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]
(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.
(1) A firm communicating with an eligible counterparty2 should have regard to the application of COBS to eligible counterparty business (COBS 1 Annex 1 Part 1).(2) This chapter does not apply in relation to communicating with an eligible counterparty other than the section on compensation information (see COBS 4.4) 2but elements of the requirements in PRIN may apply.
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
(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
(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
Firms should note the territorial scope of this chapter is also affected by:(1) the disapplication for financial promotions originating outside the United Kingdom that are not capable of having an effect within the United Kingdom (section 21(3) of the Act (Restrictions on financial promotion)) (see the defined term “excluded communication”);(2) the exemptions for overseas communicators (see the defined term “excluded communication”); and(3) the rules on financial promotions with
1This section applies to a firm:(1) which carries out any of the following activities:(a) receiving client orders;(b) executing client orders;(c) arranging for client orders to be executed;(d) carrying out transactions on behalf of the firm, or another person in the firm's group, and which are part of the firm's trading activities or the trading activities of another person in the firm's group;(e) executing orders that result from decisions by the firm to deal on behalf of its
A firm must take reasonable steps to record relevant telephone conversations, and keep a copy of relevant electronic communications, made with, sent from or received on equipment:(1) provided by the firm to an employee or contractor; or(2) the use of which by an employee or contractor has been sanctioned or permitted by the firm;to enable that employee or contractor to carry out any of the activities referred to in COBS 11.8.1 R.
The obligation in COBS 11.8.5 R and COBS 11.8.5A R2does not apply to:(1) [deleted]22(2) a discretionary investment manager, in respect of telephone conversations or electronic communications made with, sent to or received from a firm which the discretionary investment manager reasonably believes is subject to the recording obligation in COBS 11.8.5 R in respect of that conversation or communication; or(3) a discretionary investment manager, in respect of telephone conversations
For the purposes of COBS 11.8.5 R and COBS 11.8.5A R2 a relevant conversation or communication is any one of the following:(1) a conversation or communication between an employee or contractor of the firm with a client, or when acting on behalf of a client, with another person, which concludes an agreement by the firm to carry out the activities referred to in COBS 11.8.1 R as principal or as agent;(2) a conversation or communication between an employee or contractor of the firm
(1) COBS 11.8.8R (2) includes conversations and communications relating to specific transactions which are intended to lead to the conclusion of an agreement by the firm to deal with or on behalf of the client as principal or agent, even if those conversations or communications do not lead to the conclusion of such an agreement. It does not include conversations or communications which are not intended to lead to the conclusion of such an agreement, such as general conversations
A firm must take reasonable steps to retain all records made by it under COBS 11.8.5 R:(1) for a period of at least 6 months from the date the record was created;(2) in a medium that allows the storage of the information in a way accessible for future reference by the FCA, and so that the following conditions are met:(a) the FCA must be able to access the records readily;(b) it must be possible for any corrections or other amendments, and the contents of the records prior to such
The effect of these application rules and the fact that the Insurance Mediation Directive does not apply to an insurer (unless it is involved in mediation activities) is that this chapter does not apply to an insurer when it is making a personal recommendation to a professional client to take out a life policy.
(1) If a firm is managing investments on behalf of a client, it must provide the client with a periodic statement in a durable medium unless such a statement is provided by another person.(2) If the client is a retail client, the periodic statement must include such of the periodic information (COBS 16 Annex 2R) 1as is applicable. [Note: article 41(1) and (2) of the MiFID implementing Directive]
(1) In the case of a retail client, the periodic statement must be provided once every six months, except in the following cases:(a) if the retail client so requests, the periodic statement must be provided every three months;(b) if the retail client elects to receive information about executed transactions on a transaction-by-transaction basis (COBS 16.3.3 R) and there are no transactions in derivatives or other securities giving the right to acquire or sell a transferable security
(1) If the client elects to receive information about executed transactions on a transaction-by-transaction basis, a firmmanaging investments must provide promptly to the client, on the execution of a transaction, the essential information concerning that transaction in a durable medium.(2) If the client is a retail client, the firm must send him a notice confirming the transaction and containing such of the information identified in column (1) of the table in COBS 16 Annex 1R
For the purposes of calculating the unit price in the trade confirmation information or periodic information, where the order is executed in tranches, the firm may supply the client with information about the price of each tranche or the average price. If the average price is provided, the firm must supply the retail client with information about the price of each tranche upon request. [Note: article 40(4) of the MiFID implementing Directive]
(1) If a firm:(a) manages investments for a retail client; or(b) operates a retail client account that includes an uncovered open position in a contingent liability transaction,it must report to the retail client any losses exceeding any predetermined threshold, agreed between it and the retail client.(2) The firm must report:(a) no later than the end of the business day in which the threshold is exceeded; or(b) if the threshold is exceeded on a non-business day, the close of
When providing a periodic statement to a retail client, a firm should consider whether to include:(1) the collateral value in respect of any contingent liability transaction in the client's portfolio during the relevant period; and(2) option account valuations in respect of each open option written by the client in the client's portfolio at the end of the relevant period; stating:(a) the share, future, index or other investment involved;(b) the trade price and date for the opening
A firm must make, and retain, a copy of any periodic statement:(1) for MiFID or equivalent third country business, for a period of at least five years; or(2) for business that is not MiFID or, for a period of at least three years;from the date of despatch. [Note: see article 51(3) of the MiFID implementing Directive]
(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
A firm must ensure that information that contains an indication of past performance of relevant business, a relevant investment or a financial index, satisfies the following conditions:(1) that indication is not the most prominent feature of the communication;(2) the information includes appropriate performance information which covers at least the immediately preceding five years, or the whole period for which the investment has been offered, the financial index has been established,
The obligations relating to describing performance should be interpreted in the light of their purpose and in a way that is appropriate and proportionate taking into account the means of communication and the information the communication is intended to convey. For example, a periodic statement in relation to managing investments that is sent in accordance with the rules on reporting information to clients (see COBS 16) may include past performance as its most prominent featu
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
(1) In relation to a packaged product (other than a scheme, a unit-linked life policy, unit-linked personal pension scheme or a unit-linked stakeholder pension scheme (that is not a unitised with-profits life policy or stakeholder pension scheme)), the information should be given on:(a) an offer to bid basis (which should be stated) if there is an actual return or comparison of performance with other investments; or(b) an offer to offer, bid to bid or offer to bid basis (which
A firm must ensure that information that contains an indication of simulated past performance of relevant business, a relevant investment or a financial index, satisfies the following conditions:(1) it relates to an investment or a financial index;(2) the simulated past performance is based on the actual past performance of one or more investments or financial indices which are the same as, or underlie, the investment concerned;(3) in respect of the actual past performance, the
(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
(1) 1A firm that communicates to a client a projection for a packaged product which is not a financial instrument2must ensure that the projection complies with the projectionsrules in COBS 13.4, COBS 13.5 and COBS 13 Annex 2.2(2) A firm must not communicate a projection for a highly volatile product to a client unless the product is a financial instrument.
(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
(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.
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.
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.
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.
A firm that conducts designated investment business must establish, implement and maintain adequate arrangements aimed at preventing the following activities in the case of any relevant person who is involved in activities that may give rise to a conflict of interest, or who has access to inside information as defined in the Market Abuse Directive or to other confidential information relating to clients or transactions with or for clients by virtue of an activity carried out by
1The requirements of this section are without prejudice to article 3(a) of the Market Abuse Directive which prohibits any person who possesses inside information under article 2 of that directive from disclosing that information to any other person unless that disclosure is made in the normal course of the exercise of his employment, profession or duties.
The arrangements required under this section must in particular be designed to ensure that:(1) each relevant person covered by this section is aware of the restrictions on personal transactions, and of the measures established by the firm in connection with personal transactions and disclosure, in accordance with this section;(2) the firm:(a) is informed promptly of any personal transaction entered into by a relevant person, either by notification of that transaction or by other
This section does not apply to the following kinds of personal transaction:(1) personal transactions effected under a discretionary portfolio management service where there is no prior communication in connection with the transaction between the portfolio manager and the relevant person or other person for whose account the transaction is executed;(2) personal transactions in units or shares in collective undertakings that comply with the conditions necessary to enjoy the rights
For the purposes of this section, a person who is not:(1) a director, partner or equivalent, manager or appointed representative (or, where applicable, a tied agent) of the firm; or(2) a director, partner or equivalent, or manager of any appointed representative (or where applicable, a tied agent) of the firm;will only be a relevant person to the extent that they are involved in the provision of designated investment business or collective portfolio management services.2
Where successive personal transactions are carried out on behalf of a person in accordance with prior instructions given by that person, the obligations under this section do not apply:(1) separately to each successive transaction if those instructions remain in force and unchanged; or(2) to the termination or withdrawal of such instructions, provided that any financial instruments which had previously been acquired pursuant to the instructions are not disposed of at the same
A firm must allow a professional client or an eligible counterparty to request re-categorisation as a client that benefits from a higher degree of protection. [Note: second paragraph of article 24(2) of, and the second paragraph of section I of annex II to, MiFID and the second paragraph of article 50(2) of the MiFID implementing Directive]
It is the responsibility of a professional client or eligible counterparty to ask for a higher level of protection when it deems it is unable to properly assess or manage the risks involved. [Note: third paragraph of section I and fourth paragraph of section II.2 of annex II to MiFID and second paragraph of article 50(2) of the MiFID implementing Directive]
A firm may, either on its own initiative or at the request of the client concerned:(1) treat as a professional client or a retail client a client that might otherwise be categorised as a per se eligible counterparty;(2) treat as a retail client a client that might otherwise be categorised as a per se professional client;and if it does so, the client will be re-categorised accordingly. Where applicable, this re-categorisation is subject to the requirement for a written agreement
If a per se eligible counterparty requests treatment as a client whose business with the firm is subject to conduct of business protections, but does not expressly request treatment as a retail client and the firm agrees to that request, the firm must treat that eligible counterparty as a professional client. [Note: first paragraph of article 50(2) of the MiFID implementing Directive]
(1) If, in relation to MiFID or equivalent third country business a per se professional client or a per se eligible counterparty requests treatment as a retail client, the client will be classified as a retail client if it enters into a written agreement with the firm to the effect that it will not be treated as a professional client or eligible counterparty for the purposes of the applicable conduct of business regime.(2) This agreement must specify the scope of the re-categorisation,
(1) In accordance with Principle 7 (communications with clients) if a firm at its own initiative re-categorises a client in accordance with this section, it should notify that client of its new category under this section.(2) If the firm already has an agreement with the client, it should also consider any contractual requirements concerning the amendment of that agreement.
The ways in which a client may be provided with additional protections under this section include re-categorisation:(1) on a general basis; or(2) on a trade by trade basis; or(3) in respect of one or more specified rules; or(4) in respect of one or more particular services or transactions; or(5) in respect of one or more types of product or transaction. [Note: second paragraph of article 24(2) of MiFID]
Each of the following is a per se professional client unless and to the extent it is an eligible counterparty or is given a different categorisation under this chapter:(1) an entity required to be authorised or regulated to operate in the financial markets. The following list includes all authorised entities carrying out the characteristic activities of the entities mentioned, whether authorised by an EEA State or a third country and whether or not authorised by reference to a
1In relation to MiFID or equivalent third country business a local authority or a public authority is not likely to be a regional government for the purposes of COBS 3.5.2 R (4). 2In the FCA's opinion, a local authority may be a per se professional client for those purposes if it meets the test for large undertakings in COBS 3.5.2 R (2)2.22
A firm may treat a client as an elective professional client if it complies with (1) and (3) and, where applicable, (2):(1) the firm undertakes an adequate assessment of the expertise, experience and knowledge of the client that gives reasonable assurance, in light of the nature of the transactions or services envisaged, that the client is capable of making his own investment decisions and understanding the risks involved (the "qualitative test");(2) in relation to MiFID or equivalent
Before deciding to accept a request for re-categorisation as an elective professional client a firm must take all reasonable steps to ensure that the client requesting to be treated as an elective professional client satisfies the qualitative test and, where applicable, the quantitative test. [Note: second paragraph of section II.2 of annex II to MiFID]
(1) If a firm becomes aware that a client no longer fulfils the initial conditions that made it eligible for categorisation as an elective professional client , the firm must take the appropriate action.(2) Where the appropriate action involves re-categorising that client as a retail client, the firm must notify that client of its new categorisation. [Note: fourth paragraph of section II.2 of annex II to MiFID and article 28(1) of the MiFID implementing Directive]
The EEA territorial scope rule modifies the default territorial scope of the section on personal account dealing (see COBS 11.7) to the extent necessary to be compatible with European law (see paragraph 1.1G5 of Part 3 of COBS 1 Annex 1). This means that the section on personal account dealing also applies to passported activities carried on by a UK MiFID investment firm or a UK UCITS management company5 from a branch in another EEA state, but does not apply to the UKbranch of
3The section on best execution (COBS 11.2) does not apply to a firm when:(1) executing orders: or(2) placing orders with other entities for execution: or(3) transmitting orders to other entities for execution;in relation to a spread-bet which is not a financial instrument, where the firm has not made a personal recommendation in relation to that spread-bet.
(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)
A firm must ensure that information:(1) includes the name of the firm;(2) is accurate and in particular does not emphasise any potential benefits of relevant business or a relevant investment without also giving a fair and prominent indication of any relevant risks;(3) is sufficient for, and presented in a way that is likely to be understood by, the average member of the group to whom it is directed, or by whom it is likely to be received; and(4) does not disguise, diminish or
In deciding whether, and how, to communicate information to a particular target audience, a firm should take into account the nature of the product or business, the risks involved, the client's commitment, the likely information needs of the average recipient, and the role of the information in the sales process.
(1) If information compares relevant business, relevant investments, or persons who carry on relevant business, a firm must ensure that:(a) the comparison is meaningful and presented in a fair and balanced way; and(b) in relation to MiFID or equivalent third country business;(i) the sources of the information used for the comparison are specified; and(ii) the key facts and assumptions used to make the comparison are included.(2) In this rule, in relation to MiFID or equivalent
(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
(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
(1) If a firm (F) is aware that a person (C1) with or for whom it is providing services is acting as agent for another person (C2) in relation to those services, C1, and not C2, is the client of F in respect of that business.(2) Paragraph (1) does not apply if:(a) F has agreed with C1 in writing to treat C2 as its client; or(b) C1 is neither a firm nor an overseas financial services institution1 and the main purpose of the arrangements between the parties is the avoidance of duties
(1) This rule applies if a firm (F1), in the course of performing MiFID or equivalent third country business, receives an instruction to perform an investment or ancillary service on behalf of a client (C) through another firm (F2), if F2 is:(a) a MiFID investment firm or a third country investment firm; or(b) an investment firm that is:(i) a firm or authorised in another EEA State; and(ii) subject to equivalent relevant requirements.(2) F1 may rely upon:(a) any information about
(1) If F1 is required to perform a suitability assessment or an appropriateness assessment under COBS 9 or COBS 10, it may rely upon a suitability assessment performed by F2, if F2 was subject to the requirements for assessing suitability in COBS 9 (excluding the basic advicerules) or equivalent requirements in another EEA State in performing that assessment.(2) If F1 is required to perform an appropriateness assessment under COBS 10, it may rely upon an appropriateness assessment
(1) This rule applies if the rule on reliance on other investment firms (COBS 2.4.4 R) does not apply.(2) A firm will be taken to be in compliance with any rule in this sourcebook that requires it to obtain information to the extent it can show it was reasonable for it to rely on information provided to it in writing by another person.
(1) In relying on COBS 2.4.6 R, a firm should take reasonable steps to establish that the other person providing written information is not connected with the firm and is competent to provide the information.(2) Compliance with (1) may be relied upon as tending to establish compliance with COBS 2.4.6 R.(3) Contravention of (1) may be relied upon as tending to establish contravention of COBS 2.4.6 R.
It will generally be reasonable (in accordance with COBS 2.4.6R (2)) for a firm to rely on information provided to it in writing by an unconnected authorised person or a professional firm, unless it is aware or ought reasonably to be aware of any fact that would give reasonable grounds to question the accuracy of that information.
(1) Subject to (3) and (4), a firm must ensure that a direct offer financial promotion that is addressed to, or disseminated in such a way that it is likely to be received by, a retail client contains:(a) such of the information referred to in the rules on information disclosure (COBS 6.1.4 R, COBS 6.1.6 R, COBS 6.1.7 R, COBS 6.1.9 R, COBS 14.3.2 R, COBS 14.3.3 R, COBS 14.3.4 R and COBS 14.3.5 R) as is relevant to that offer or invitation; and[Note: article 29(8) of the MiFID
In order to enable a client to make an informed assessment of a relevant investment or relevant business, a firm may wish to include in a direct offer financial promotion:(1) a summary of the taxation of any investment to which it relates and the taxation consequences for the average member of the group to whom it is directed or by whom it is likely to be received;1(2) a statement that the recipient should seek a personal recommendation if he has any doubt about the suitability
4COBS 4.13.2 R (Marketing communications relating to UCITS schemes or EEA UCITS schemes) and COBS 4.13.3 R (Marketing communications relating to feeder UCITS) contain additional disclosure requirements for firms in relation to marketing communications (other than key investor information) that concern particular investment strategies of a UCITS scheme or EEA UCITS scheme.
(1) 2A firm must not communicate or approve a direct offer financial promotion:(a) relating to a warrant or derivative;(b) to or for communication to a retail client; and(c) where the firm will not itself be required to comply with the rules on appropriateness (see COBS 10);unless the firm has adequate evidence that the condition in (2) is satisfied.(2) The condition is that the person who will arrange or deal in relation to the derivative or warrant will comply with the rules