BCOBS 2.2 The fair, clear and not misleading rule

The fair, clear and not misleading rule applies in a way that is appropriate and proportionate taking into account the means of communication and the information that it is intended to convey. So a communication addressed to a banking customer, a payment service customer or an electronic money customer who is not a consumer may not need to include the same information, or be presented in the same way, as a communication addressed to a consumer.

The rules in SYSC 3 (Systems and Controls) and SYSC 4 (General organisational requirements) require a firm to put in place systems and controls or policies and procedures in order to comply with the rules in COBS 4.6 (Past, simulated past and future performance), COBS 4.7.1 R (Direct offer financial promotions), COBS 4.10 (Approving and confirming compliance of financial promotions) and this chapter of BCOBS.

Part 7 (Offences relating to Financial Services) of the Financial Services Act 2012 create criminal offences relating to certain misleading statements and practices.

A communication, financial promotion or payment service or electronic money promotion should not describe a feature of a product or service as "guaranteed", "protected" or "secure", or use a similar term unless:

1. (1)

   that term is capable of being a fair, clear and not misleading description of it; and

2. (2)

   the firm or other provider 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.

A communication, or payment service or electronic money promotion relating to a currency transfer service is likely to be misleading if it presents an exchange rate in a way that is likely to give the impression that the rate is available to a person or a class of persons if that rate is unlikely to be obtained by that person or class of persons with respect to a typical transaction.

The inclusion of wording in a communication or payment service or electronic money promotion to the effect that an exchange rate shown is not available to particular customers will not necessarily prevent the presentation of the exchange rate being misleading.

A communication or a financial promotion that refers to sums available by way of an authorised non-business overdraft agreement should make clear that such sums constitute borrowing or credit.

A firm is reminded of its obligations under ESG 4.3.1R in relation to a communication, or when it communicates or approves a financial promotion, that references the sustainability characteristics of a product or service.