Content Options

View Options

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

COB 12.1 Application

COB 12.1.1R

This chapter applies to a firm when it carries on any of the following activities:

  1. (1)

    advising on syndicate participation at Lloyd's or agreeing to carry on that regulated activity;

  2. (2)

    managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's or agreeing to carry on that regulated activity;

  3. (3)

    carrying on designated investment business in relation to funds at Lloyd's;

  4. (4)

    communicating or approving a financial promotion in relation to:

    1. (a)

      the underwriting capacity of a Lloyd's syndicate; or

    2. (b)

      membership of a Lloyd's syndicate; or

    3. (c)

      effecting or carrying out life policies written at Lloyd's; or3

    4. (d)

      any of the activities specified in (1) or (3).

COB 12.1.2G

Underwriting agents should be aware that the Society's regulatory requirements remain applicable to them even if these requirements cover similar matters to the applicable COB provisions.

COB 12.1.3G

This chapter does not affect the application of COB to a firm when carrying on activities other than those specified in COB 12.1.1 R.

COB 12.1.4G

The Society is itself also required to comply with the requirements of INSPRU which contains rules and guidance in respect of areas where COB provisions also have relevance. In particular LLD 4.2.1 R places a requirement on the Society to make appropriate byelaws governing conduct in the capacity transfer market. LLD also imposes at LLD 9.2.3 R a requirement on the Society to comply with the standards of due care and diligence set out in CASS in relation to the custody of assets that constitute members' funds.

Purpose

COB 12.1.5G

The purpose of this chapter is to protect the interests of members or potential members and policyholders or potential policyholders.

COB 12.1.6G

This chapter provides rules that apply to firms when carrying on the activities in COB 12.1.1 R. Rules from other chapters are modified for this purpose. These COB provisions will apply to the activities of members' agents, members' advisers, the Society, managing agents (in some circumstances) and to any other authorised person undertaking any of the activities specified in COB 12.1.1 R.

Rules of general application

COB 12.1.7R
  1. (1)

    When a firm is carrying on any of the activities specified in COB 12.1.1 R (1), COB applies in full, except to the extent disapplied under COB 12.1.14 R.

  2. (2)

    COB does not apply to a firm when carrying on the activity specified in COB 12.1.1 R (2), except as specified in COB 12.1.15 R.

  3. (3)

    COB 3 applies to a firm when carrying on the activity specified in COB 12.1.1 R (4).

COB 12.1.8G

Firms subject to the financial promotion rules under COB 12 are also reminded that syndicate business plans may be used in ways that bring them within the definition of a financial promotion. In such cases the financial promotion rules will apply, in particular COB 3.6 (Confirmation of compliance), COB 3.7 (Records) and COB 3.8 (Form and content of financial promotions).

COB 12.1.9G

A firm which provides advice to a person on a transaction in the capacity transfer market will be carrying on the activity specified in COB 12.1.1 R (1) and will be subject to COB, as specified in COB 12.1.7 R (1) in respect of that activity.

COB 12.1.10G

COB does not apply to a firm when carrying on the regulated activity of arranging(bringing about)deals ininvestments that relate to the underwriting capacity of a Lloyd's syndicate or membership of a Lloyd's syndicate.

COB 12.1.11R

A firm carrying on the activity specified at COB 12.1.1 R (1) must, in addition to meeting the requirements of COB 5, take reasonable steps to ensure that it does not advise a potential member who is a private customer to become a member of a syndicate unless membership of the Society itself is suitable for the private customer having regard to the facts disclosed by him and other relevant facts about the private customer of which the firm is or reasonably should be aware.

Definitions and modifications

COB 12.1.12R

When a firm is carrying on activities to which this chapter applies, any reference in COB to the term:

  1. (1)

    "designated investment" is to be taken to include the following specified investments:

    1. (a)

      the underwriting capacity of a Lloyd's syndicate;

    2. (b)

      membership of a Lloyd's syndicate; and

    3. (c)

      rights to or interests in the specified investments in (a) or (b);

  2. (2)

    "designated investment business" is to be taken to include the following regulated activities:

    1. (a)

      advising on syndicate participation at Lloyd's;

    2. (b)

      managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's; and

    3. (c)

      agreeing to carry on the regulated activities in (a) or (b).

COB 12.1.13R

When a firm is carrying on activities to which this chapter applies, any reference in COB to the term customer is to be taken to refer to a member or potential member except in the case of COB 6.7 (Cancellation and withdrawal) to COB 6.8 (Insurance Contracts: life and general) where it refers to a policyholder or potential policyholder.

COB 12.1.14R

This table disapplies parts of COB to a firm when carrying on the activities to which COB 12.1.7 R (1) relates.

Chapter

Description

Disapplication

4.2

Terms of business and client agreements with customers

COB 4.2.11 E and COB 4.2.12 R are disapplied.

6

Product disclosure and the customer's right to cancel or withdraw

COB 6 is disapplied.

8.2

Periodic statements

COB 8.2 is disapplied to a firmadvising on syndicate participation at Lloyd's.

COB 8.2.7 is disapplied to the Society.

[deleted]

[deleted]

[deleted].1

11

Trustee and depositary activities

COB 11 is disapplied.

COB 12.1.15R

This table applies COB to firms when carrying on the activity to which COB 12.1.7 R (2) relates except where ICOB applies in relation to non-investment insurance contracts.

2

Chapter

Description

Application

1

Application and general provisions

Applied

2

Rules which apply to all firms conducting designated investment business

Applied

4.1

Client classification

Applied

6.7

Cancellation and withdrawal

Applied

6.8

Insurance contracts - life

policies3

Applied

8A2

Claims handling2

Applied2

COB 12.1.16G

The tables at COB 12.1.17 G to COB 12.1.21 G are provided to help firms when carrying on those activities to which this chapter applies locate those rules that are particularly relevant to their activities. Firms should be aware that these tables may not include all rules which apply to an individual firm as these will vary depending on the firm's particular circumstances and that there may be other rules that apply.3

COB 12.1.17G

Location of rules of general application to firms when carrying on activities to which this chapter applies.

This table forms part of COB 12.1.16 G.

Chapter

Description

COB 1

Application and general provisions

COB 2

Rules which apply to all firms conducting designated investment business

COB 4.1

Client classification

COB 12.1.18G

Location of rules of particular relevance to a firm when advising on syndicate participation at Lloyd's.

This table forms part of COB 12.1.16 G.

Chapter

Description

COB 4.2.1 R to COB 4.2.10 R (inclusive), COB 4.2.13 R to COB 4.2.14 R

Terms of business and customer agreements

COB 5

Advising and selling

COB 7.1

Conflict of interest and material interest

COB 12.1.19G

Location of rules of particular relevance to a firm when carrying on designated investment business in relation to funds at Lloyd's.

This table forms part of COB 12.1.16 G.

Chapter

Description

COB 4.2.1 R to COB 4.2.10 R (inclusive), COB 4.2.13 R and COB 4.2.14 R

Terms of business and customer agreements

COB 7

Dealing and managing

COB 8.1

Confirmation of transactions

COB 8.2.1 to COB 8.2.6 (inclusive) and COB 8.2.9

Periodic statements

COB 12.1.20G

Location of rules of particular relevance to a firm managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's.

This table forms part of COB 12.1.16 G.

Chapter

Description

COB 6.7

Cancellation and withdrawal

COB 6.8

Insurance contracts - life policies

ICOB3

Insurance: Conduct of Business Sourcebook

COB 12.1.21G

Location of rules of particular relevance to a firm when communicating or approving financial promotions in relation to the investments and activities specified at COB 12.1.1 R (4).

This table forms part of COB 12.1.16 G.

Chapter

Description

COB 3

Financial promotion