Related provisions for COBS 11.6.2A
Table
A key features document for a non-PRIIP packaged product8 must: |
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(1) |
Include the title: ‘key features of the [name of product]’; |
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(2) |
describe the product in the order of the following headings, and by giving the following information under those headings: |
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Heading |
Information to be given |
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‘Its aims’ |
A brief description of the product’s aims |
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‘Your commitment’ or ‘Your investment’ |
What a retail client is committing to or investing in and any consequences of failing to maintain the commitment or investment |
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‘Risks’ |
The material risks associated with the product, including a description of the factors that may have an adverse effect on performance or are material to the decision to invest |
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‘Questions and Answers’ |
(in the form of questions and answers) the principle terms of the product, what it will do for a retail client and any other information necessary to enable a retail client to make an informed decision. |
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5[Note: in respect of ‘Risks’, article 185(4) of the Solvency II Directive] |
5A certified restricted investor is an individual who has signed, within the period of twelve months ending with the day on which the communication is made, a statement in the following terms:
“RESTRICTED INVESTOR STATEMENT I make this statement so that I can receive promotional communications relating to non-readily realisable securities as a restricted investor. I declare that I qualify as a restricted investor because: |
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(a) |
in the twelve months preceding the date below, I have not invested more than 10% of my net assets in non-readily realisable securities; and |
(b) |
I undertake that in the twelve months following the date below, I will not invest more than 10% of my net assets in non-readily realisable securities. |
Net assets for these purposes do not include: |
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(a) |
the property which is my primary residence or any money raised through a loan secured on that property; |
(b) |
any rights of mine under a qualifying contract of insurance; or |
(c) |
any benefits (in the form of pensions or otherwise) which are payable on the termination of my service or on my death or retirement and to which I am (or my dependants are), or may be entitled; or7 |
7 (d) |
any withdrawals from my pension savings (except where the withdrawals are used directly for income in retirement). |
I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me to seek advice from an authorised person who specialises in advising on non-readily realisable securities. Signature: Date:” |
1Each of the exemptions listed below applies only if the retail client is of the type described for the exemption and provided any additional conditions for the exemption are met.
Title |
Type of retail client |
Additional conditions |
(a) An individual who meets the requirements set out in COBS 4.12.6R; or (b) an individual in an EEA State other than the UK who meets requirements which are broadly equivalent to those set out in COBS 4.12.6R; or (c) a person (or persons) legally empowered to make investment decisions on behalf of an individual who meets the earnings or net asset requirements in (a) or (b) above |
The firm must consider that the investment is likely to be suitable for that individual, based on a preliminary assessment of that individual’s profile and objectives (see COBS 4.12.5G(2)). |
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(a) An individual who meets the requirements set out in COBS 4.12.7R; or (b) an individual in an EEA State other than the UK who meets requirements which are broadly equivalent to those set out in COBS 4.12.7R; or (c) an individual who meets the requirements for either (a) or (b) above and who is legally empowered (solely or jointly with others) to make investment decisions on behalf of another person who is the firm's client. |
Not applicable. |
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(a) An individual who meets the requirements set out in COBS 4.12.8R; or (b) an individual in an EEA State other than the UK who meets requirements which are broadly equivalent to those set out in COBS 4.12.8R; or (c) an individual who meets the requirements for either (a) or (b) above and who is legally empowered (solely or jointly with others) to make investment decisions on behalf of another person who is the firm's client. |
The firm must consider that the investment is likely to be suitable for that individual, based on a preliminary assessment of that individual’s profile and objectives (see COBS 4.12.5G(2)). |
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Solicited advice |
Any retail client. |
The restrictions do not apply provided all of the following requirements are met: (a) there is no invitation or inducement to participate in, acquire or underwrite the investment other than a personal recommendation on the investment; (b) the personal recommendation is made following a specific request by that client for advice on the investment; and (c) the client has not previously received any other communication (whether or not a financial promotion) from the firm or from a person connected to the firm which is intended to influence the client in relation to the investment. (See Note 1) |
MiFID or equivalent third country business other than financial promotions |
Any retail client. |
COBS 22.3.1R(2)(a) does not apply to MiFID or equivalent third country business (see COBS 9.3.5G). |
Prospectus |
Any retail client. |
The restrictions do not apply to the distribution of a prospectus required under the Prospectus Directive. |
Issuers |
Any retail client |
To the extent that the firm is acting as issuer of a contingent convertible instrument, the restrictions only apply to the original issuance of the contingent convertible instrument and not to subsequent trading in the secondary market. |
Indirect investment |
Any retail client |
The restrictions do not apply in relation to a beneficial interest in a contingent convertible instrument acquired through participation in a regulated collective investment scheme, investment in a non-mainstream pooled investment (provided it is not a CoCo fund), or membership of an occupational pension scheme. |
Note 1 |
A person is connected with a firm if it acts as an introducer or appointed representative for that firm or if it is any other person, regardless of authorisation status, who has a relevant business relationship with the firm. |
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Note 2 |
See COBS 2.4 for rules and guidance on agent as client and reliance on others. |
A consumer has a right to cancel any of the following contracts with a firm:
Cancellable contract |
Cancellation period |
Supplementary provisions |
Life and pensions: |
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• a life policy (including a pension annuity, a pension policy or within a wrapper) • a contract to join a personal pension scheme or a stakeholder pension scheme • a pension contract • a contract for a pension transfer • a contract to vary an existing personal pension scheme or stakeholder pension scheme by exercising, for the first time, an option to make income withdrawals6 |
30 calendar days |
For a life policy effected when opening or transferring a wrapper, the 30 calendar day right to cancel applies to the entire arrangement For a contract to buy a unit in a regulated collective investment scheme within a pension wrapper, the cancellation right for 'non-life/pensions (advised but not at a distance)' below may apply Exemptions may apply (see COBS 15 Annex 1 ) |
6Lifetime ISAs (advised but not at a distance): |
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6• a non-distance contract to open or transfer a lifetime ISA |
30 calendar days |
These rights arise only following a personal recommendation of the contract (by the firm or any other person). Exemptions may apply (see COBS 15 Annex 1) |
Cash deposit ISAs: |
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• a contract for a cash deposit ISA |
14 calendar days |
Exemptions may apply (see COBS 15 Annex 1 ) |
Non-life/pensions (advised but not at a distance): a non-distance contract:6 |
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• to buy a unit in a regulated collective investment scheme (including within a wrapper or pension wrapper) • to open or transfer a child trust fund (CTF) • to open or transfer an ISA (other than a lifetime ISA)6 • for an Enterprise Investment Scheme 2 |
14 calendar days |
These rights arise only following a personal recommendation of the contract (by the firm or any other person).2 For a unit bought when opening or transferring a wrapper or pension wrapper, the 14 calendar day right to cancel applies to the entire arrangement.2 Exemptions may apply (see COBS 15 Annex 1 ).2 |
Non-life/pensions (at a distance): a distance contract, relating to:6 |
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14 calendar days |
Exemptions may apply (see COBS 15 Annex 1 ) |
[Note: article186 of the Solvency II Directive and5 article 6(1) of the Distance Marketing Directive]
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