COB 10.3 Modification of the allocation rule
COB 10.3 applies to an operator only when undertaking scheme management activity.
COB 10.3.3 E replaces COB 7.7.6 E. COB 10.3.3 E modifies the general rule on the timing of allocation (that is, COB 7.7.5 R) to take into account the kind of scheme in which no participant is a private customer.1
- (1)
To allocate promptly, an operator which has aggregated an order under COB 7.7.4 R should complete the allocation of the designated investments concerned within one business day of the transaction, subject to (2), (3) and (4).
- (2)
The period in (1) is within five business days if:
- (a)
the scheme is one in which no participant is a private customer; or
- (b)
the scheme is an unregulated collective investment scheme and no current participant in the scheme was a private customer on joining the scheme as a participant.
- (a)
- (3)
For the purposes of COB 10.3.3 E, all transactions in a series of transactions all of which are executed within one business day, may be treated as having been executed at the time of the last transaction, so long as a record of the time that each individual transaction was executed is made, such as by means of a time stamp.
- (4)
If transactions in a series of transactions occur over more than one business day, then the requirement in COB 7.7.5 R (and (1) or (2) as appropriate) will apply separately in relation to each business day in which any transaction is executed.
- (5)
Compliance with (1) may be relied on as tending to establish compliance with COB 7.7.5 R.
- (6)
Contravention of (1) may be relied on as tending to establish contravention of COB 7.7.5 R.
COB 10.3.5 R replaces COB 7.7.14 R. COB 10.3.5 R modifies the general rule on the record keeping of aggregated transactions (that is, COB 7.7.14 R) to take into account the fact that an operator may act on a proportional basis or otherwise and may also act for all schemes under its management or for some of the schemes under its management.
- (1)
An operator must, on executing an aggregated transaction on behalf of a number of schemes under its management, make a record of:
- (2)
If an operator aggregates a number of customer orders on behalf of a number of schemes under its management, the operator must make a record of the intended basis of allocation as soon as is practicable.
- (3)
If an operator aggregates an order for one or more schemes under its management and itself, the operator must make a record of the intended basis of allocation before the transaction is executed.