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Status: You are viewing the version of the handbook as on 2005-06-30.

COB 11.1 Application

COB 11.1.1R

This chapter applies to depositaries and trustee firms when acting as such.

COB 11.1.2G

The definition of depositary includes trustees of authorised and unauthorised unit trust schemes as well as depositaries of ICVCs. The definition of trustee firm includes any firm carrying on activity as a trustee but not an OPS firm. There is overlap between these definitions. A trustee of an authorised unit trust scheme is both a trustee firm and a depositary.

COB 11.1.3G

The definition of trustee firm includes a firm acting as personal representative.

COB 11.1.4G

Firms are reminded that trustee firm may include individuals who require authorisation and who are within the definition of trustee firm. It also includes partnerships where the partnership requires authorisation.

COB 11.1.5G

Article 66 of the Regulated Activities Order provides exclusions for some trustees, nominees and personal representatives from certain regulated activities. This chapter does not apply to a trustee firm in respect of an activity which is excluded from being a regulated activity carried on by the trustee firm under any paragraph in article 66.

COB 11.1.6G

In COB only the rules in COB 1, COB 11 and the rules applied by this chapter apply to a trustee firm or depositary.

COB 11.1.7G

This chapter does not apply with respect to any regulated activities carried on by a trustee with a trust beneficiary where the trustee firm is not acting as trustee. Such activities would be subject to the rules in COB applied otherwise than through this chapter.

COB 11.1.8G

In respect of trustee firms, the rules:

  1. (1)

    apply in addition to any duties or powers imposed or conferred upon a trustee by the general law;

  2. (2)

    do not qualify or restrict the duties or powers that the general law imposes or confers upon a trustee; trustee firms will be under a duty to observe the provisions of their trust instrument; if its provisions conflict with any applicable rule, trustees will need to take advice in resolving the conflict.

COB 11.1.9G

A depositary of a regulated collective investment scheme is also required to comply with the Collective Investment Schemes sourcebook (CIS).

COB 11.1.10G

A depositary of an ICVC is also required to comply with the OEIC Regulations.

COB 11.1.11G

All depositaries and trustee firms are also required to comply in particular with the Principles for Businesses (PRIN), Senior Management Arrangements, Systems and Controls (SYSC) and the Money Laundering sourcebook (ML).

Purpose

COB 11.1.12G

The purpose of this chapter is to select rules to apply to the activities of trustee firms and depositaries. COB is modified by this chapter for that purpose. The rules in this chapter:

  1. (1)

    redefine customer so that it applies meaningfully in the trustee firm/depositary context. A trustee firm, for example, may be both the customer and the firm. A requirement to make a disclosure to a customer may therefore not be clear when applied to a trustee firm - the requirement may be taken to apply to the trustees as a body, or to the trust beneficiaries. In the context of collective investment schemes disclosure may appropriately be effected through reports and documentation sent to the participants;

  2. (2)

    recognise that some trustee firms may not be experts in investment; in consequence they should be allowed to delegate regulatory responsibility for compliance with COB to other suitable firms.

  3. (3)

    apply appropriate rules to different types of trustee; for example the rules in COB 11.5.3 R are not applied to personal representatives because this would amongst other things require such a firm to send out periodic statements.

  4. (4)

    apply rules specifically devised for trustee firms or depositaries; for example, COB 11.8 (Proper advice) applies only to trustee firms.