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

COB 3.6 Confirmation of compliance

Confirmation of compliance

COB 3.6.1R
  1. (1)

    Before a firm communicates or approves a non-real time financial promotion, it must confirm that the financial promotion complies with the rules in this chapter.

  2. (2)

    A firm must arrange for the confirmation exercise in (1) to be carried out by an individual or individuals with appropriate expertise.

COB 3.6.2G
  1. (1)

    In COB 3.6.1 R (2) 'appropriate expertise' will vary depending on the complexity of the financial promotion and the investment or service to which it relates. The individuals engaged by a firm to confirm the compliance of its financial promotions with this chapter may themselves have different levels of expertise and therefore a different level of authority for confirmation depending on the type of financial promotion and the investment or service involved.

  2. (2)

    A firm may arrange for a third party with appropriate expertise to carry out the confirmation exercise on the firm's behalf, but the responsibility for the financial promotion remains with the firm.

Withdrawing confirmation

COB 3.6.3R

If, at any time after it has completed a confirmation exercise in COB 3.6.1 R (1), a firm becomes aware that a financial promotion no longer complies with the rules in this chapter, it must ensure that the financial promotion is withdrawn as soon as is reasonably practicable by:

  1. (1)

    ceasing to communicate it;

  2. (2)

    withdrawing its approval (if applicable); and

  3. (3)

    notifying any person that the firm knows to be relying on its approval (if applicable) or confirmation (under COB 3.6.5 R).

COB 3.6.4G
  1. (1)

    COB 3.6.3 R is of particular importance to a financial promotion, such as a product brochure, that a firm uses over a period of time. It has little application to a financial promotion which is of its nature ephemeral, for example a mobile phone text message. Further, a financial promotion which clearly speaks as at a particular date will not cease to comply with the rules in this chapter merely because the passage of time has rendered it out-of-date; an example would be a dated analyst's report.

  2. (2)

    For compliance with COB 3.6.3 R, the FSA will expect a firm to monitor its relevant financial promotions as part of the firm's routine compliance monitoring procedures. A firm may find it helpful to designate a relevant financial promotion with a 'review date', a date at which the financial promotion should be checked once more against the rules of this chapter. If it is found no longer to meet these requirements it should be withdrawn as soon as is reasonably practicable.

  3. (3)

    If at any time a firm becomes aware that private customers may have been misled by a financial promotion it should consider whether private customers who have responded to the financial promotion should be contacted with a view to explaining the position and offering any appropriate form of redress to those who have suffered financial loss.

Communicating a financial promotion where another firm has confirmed compliance

COB 3.6.5R

A firm will not contravene any of the rules in this chapter in circumstances where it (firm 'A') communicates a non-real time financial promotion which has been produced by another person provided that:

  1. (1)

    A takes reasonable care to establish that another firm (firm 'B') has already confirmed the compliance of the financial promotion in accordance with COB 3.6.1 R;

  2. (2)

    A takes reasonable care to establish that A communicates the financial promotion only to recipients of the type for whom it was intended at the time B carried out the confirmation exercise; and

  3. (3)

    so far as A is, or ought reasonably to be, aware:

    1. (a)

      the financial promotion has not ceased to be clear, fair and not misleading since that time; and

    2. (b)

      B has not withdrawn the financial promotion.