Related provisions for COBS 3.5.4
1 - 20 of 20 items.
When executing a client order, a firm must take into account the following criteria for determining the relative importance of the execution factors:(1) the characteristics of the client including the categorisation of the client as retail or professional;(2) the characteristics of the client order;(3) the characteristics of financial instruments that are the subject of that order;(4) the characteristics of the execution venues to which that order can be directed; and2(5) for
A firm's execution policy should determine the relative importance of each of the execution factors or establish a process by which the firm will determine the relative importance of the execution factors. The relative importance that the firm gives to those execution factors must be designed to obtain the best possible result for the execution of its client orders. Ordinarily, the FCA would expect that price will merit a high relative importance in obtaining the best possible
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]
(1) A small authorised UK AIFM of an unauthorised AIF or a residual CIS operator6 need not provide a periodic statement:6(a) (i) to an investor in the fund6 who is a retail client ordinarily resident outside the United Kingdom; or6(ii) to an investor in the fund6 who is a professional client; if the investor6 has so requested or the firm6 has taken reasonable steps to establish that the investor6 does not wish to receive it; or6666(b) if it would duplicate a statement to be provided
Table: Periodic statements
This table belongs to COBS 18.5.12 E.
Periodic statements |
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Suitable intervals |
(1) |
A periodic statement should be provided at least: |
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(a) |
six-monthly; or |
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(b) |
once in any other period, not exceeding 12 months, which has been mutually agreed between the firm and the investor in the fund.6 6 |
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Adequate information |
(2) |
(a) |
A periodic statement should contain: |
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(i) |
(A) |
The information set out in the table of general contents of a periodic statement; |
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(B) |
where the portfolio of the fund6 includes uncovered open positions in contingent liability investments, the additional information in the table listing the contents of a periodic statement (see COBS 18.5.18 E6) in respect of contingent liability investments; or 66 |
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(ii) |
such information as an investor6 who is a retail client ordinarily resident outside the United Kingdom, or a professional client, has on his own initiative agreed with the firm6 as adequate. 66 |
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(b) |
For a firm acting as an outgoing ECA provider, the words 'United Kingdom' is replaced by 'EEA' |
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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
(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,
A firm must provide a client with a general description of the nature and risks of designated investments, taking into account, in particular, the client's categorisation as a retail client or a professional client. That description must:(1) explain the nature of the specific type of designated investment concerned, as well as the risks particular to that specific type of designated investment, in sufficient detail to enable the client to take investment decisions on an informed
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) 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
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) When providing a service to which this chapter applies, a firm must ask the client to provide information regarding his knowledge and experience in the investment field relevant to the specific type of product or service offered or demanded so as to enable the firm to assess whether the service or product envisaged is appropriate for the client.(2) When assessing appropriateness, a firm:(a) must determine whether the client has the necessary experience and knowledge in order
(1) If a firm makes a personal recommendation or manages investments for a professional client in the course of MiFID or equivalent third country business, it is entitled to assume that, in relation to the products, transactions and services for which the professional client is so classified, the client has the necessary level of experience and knowledge for the purposes of COBS 9.2.2R (1)(c).(2) If the service consists of making a personal recommendation to a per se professional
1The duty to provide best execution does not apply where:(1) the firm has agreed with a professional client that it does not owe a duty of best execution to him; or(2) the firm relies on another person to whom it passes a customer order for execution to provide best execution, but only if it has taken reasonable care to ensure that he will do so.
(1) 1This
chapter applies to a firm in
relation to designated investment business carried
on for:(a) a retail
client; and(b) in relation to MiFID
or equivalent third country business, a professional
client.(2) If expressly provided, this chapter
also applies to a firm in relation
to other ancillary services carried
on for a client, but only in
relation to its MiFID or equivalent third
country business.(3) But this chapter does not apply
to a firm to the extent that
it is effecting
This chapter relates to parts of the Handbook whose application depends on whether a person is a client, a retail client, a professional client or an eligible counterparty. However, it does not apply to the extent that another part of the Handbook provides for a different approach to client categorisation. For example, a separate approach to client categorisation is set out in the definition of a retail client for a firm that gives basic advice2.
3A firm, other than a venture capital firm, which is managing investments for a professional client that is not a natural person must disclose clearly on its website, or if it does not have a website in another accessible form:(1) the nature of its commitment to the Financial Reporting Council’s Stewardship Code; or(2) where it does not commit to the Code, its alternative investment strategy.
A1firm must:(1) notify a new client of its categorisation as a retail client, professional client, or eligible counterparty in accordance with this chapter; and(2) prior to the provision of services, inform a client in a durable medium about:(a) any right that client has to request a different categorisation; and(b) any limitations to the level of client protection that such a different categorisation would entail. [Note: paragraph 2 of section I of annex II to MiFID and articles
This chapter requires a firm to allow a client to request re-categorisation as a client that benefits from a higher degree of protection (see COBS 3.7.1 R). A firm must therefore notify a client that is categorised as a professional client or an eligible counterparty of its right to request a different categorisation whether or not the firm will agree to such requests. However, a firm need only notify a client of a right to request a different categorisation involving a lower
A3firm to which SYSC 9 applies 3is required to keep orderly records of its business and internal organisation (see SYSC 9, General rules on record-keeping). Other firms are 3 required to take reasonable care to establish and maintain such systems and controls as are appropriate to their 3business (see SYSC 3, Systems and controls). The records may be expected to reflect the different effect of the rules in this chapter depending on whether the client is a retail client or a professional