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COB 3 Annex 1 An overview of some of the main exemptions contained in the Financial Promotion Order

G

This annex belongs to COB 3.2.7 G (2) and summarises some of the main exemptions in the Financial Promotion Order. It is not an exhaustive list, and does not seek to replace the Order itself. The first column contains the article number, and the name of the exemption as set out in the Financial Promotion Order, the second column indicates to which type of financial promotions the exemption applies (unsolicited real time, solicited real time or non-real time), the third column indicates to which controlled activities and controlled investments the exemption applies and the final column gives a brief summary of the principal conditions required by the exemption. In all cases, firms wishing to use an exemption should consult the Order and in particular take note of the conditions which apply.

References to articles are to articles of the Financial Promotion Order and to paragraphs are to paragraphs of Schedule 1 to the Financial Promotion Order. For non-investment insurance contracts, firms should refer to ICOB.3

Article no. and name of exemption

Type of promotion: Unsolicited real time, solicited real time, non-real time

Controlled activity/controlled investment

Other conditions

16(2) Exempt persons

Unsolicited real time

All

Made by a person who is an appointed representative carrying on the business for which his principal has accepted responsibility for the purposes of section 39 of the periodic statement; and in relation to which the appointed representative is exempt from the general prohibition; and where the communication is one which, if made by the principal, would comply with the financial promotion rules relevant to a communication of that kind

17 Generic promotions

All

All

Does not identify (directly or indirectly) a person who provides the controlled investment to which the financial promotion relates; and does not identify directly or indirectly any person as a person who carries on a controlled activity in relation to that controlled investment

18 Mere conduits

All

All

Made by a person who acts as a mere conduit for it (other than electronic commerce communications)

18A Electronic commerce communications: mere conduits, caching and hosting

All

All

Where the making of the communication constitutes the provision of an information society service of a kind described as 'mere conduit', 'caching' or 'hosting' under the E-Commerce Directive and the conditions mentioned in the directive are met

19 Investment professionals

All

All

Made only to recipients whom the person making the communication believes on reasonable grounds to be investment professionals; or may reasonably be regarded as directed only at such recipients

20B Incoming electronic commerce communications

Non-real time

All

Incoming electronic commerce communications other than:

(1) a communication which constitutes an advertisement by the operator of a UCITS scheme of units in that scheme; or

(2) a communication consisting of an invitation or inducement to enter into a contract of insurance, where made by an undertaking with authorisation in accordance with article 6 of the First Life Directive or the First Non-Life Directive, and the insurance falls within the scope of any of the Insurance Directives; or

(3) an unsolicited communication made by electronic mail.

22 Deposits: non-real time communications

Non-real time

Accepting deposits within paragraph 1

Accompanied by information specified in article 22(2)

23 Deposits: real time communications

Real time

Accepting deposits within paragraph 1

None

24 Relevant insurance activity: non-real time communications

Non-real time

Effecting and carrying out contracts of insurance within paragraph 2 in relation to contracts of insurance other than life policies

Accompanied by information specified in article 24(2)

26 Relevant insurance activity: real time communications

Real time

Effecting and carrying out contracts of insurance within paragraph 2 in relation to contracts of insurance other than life policies

None

28 One-off non-real time communications and solicited real time communications

Solicited real time Non real time

Note 1

One-off communication

28A One-off unsolicited real time communications

Unsolicited real time

Note 1

One-off communication where the communicator believes on reasonable grounds that the recipient understands the risks associated with engaging in the investment activity to which the communication relates; and at the time that the communication is made the communicator believes on reasonable grounds that the recipient would expect to be contacted by him in relation to the investment activity to which the communication relates

38 Persons in business of placing promotional material

All

Note 1

Made to a person whose business it is to place, or arrange for the placing of, promotional material provided that it is communicated so that he can place or arrange for placing it

40 Participants in certain recognised collective investment schemes

Solicited real time Non-real time

Note 1

Made by a person who is the operator of a scheme recognised under section 270 or 272 of the Act; and to persons in the United Kingdom who are participants in any such recognised scheme operated by the person making the communication; and which relates only to such recognised schemes as are operated by that person or to units in such schemes

48 Certified high net worth individuals

Solicited real time Non-real time

Note 2

(1) Made to a

certified high net worth individual (as defined by article 48(2)); and (2) does not invite or induce the recipient to engage in investment activity with the person who signed the certificate of high net worth; and (3) accompanied by an indication of the matters specified by article 48(4).

49 High net worth companies, unincorporated associations etc

All

Note 1

Either:

(1) made only to recipients whom the person making the financial promotion believes on reasonable grounds to be persons to whom the conditions set out in the article apply; or

(2) may reasonably be regarded as directed only at such persons.

50 Sophisticated investors

All

Note 1

(1) Made to a certified sophisticated investor (as defined by article 50(1));

(2) does not invite or induce the recipient to engage in investment activity with the person who has signed the certificate;

(3) relates only to a description of investment in respect of which that investor is certified; and

(4) accompanied by an indication of the matters specified by article 50 (3)

51 Associations of high net worth or sophisticated investors

Solicited real time Non-real time

Note 1

(1) Made to an association, the membership of which the person making the financial promotion believes on reasonable grounds comprises wholly or predominantly persons who are certified high net worth individuals within article 48, high net worth persons within article 49(2)(a) to (d) and certified sophisticated investors within article 50 ; and

(2) relates only to an investment under the terms of which a person cannot incur a liability or obligation to pay or contribute more than he commits by way of investment

59 Annual accounts and directors' report

All

Note 3

Made by a body corporate (other than an open-ended investment company) which consists of, or is accompanied by, the whole or any part of the annual accounts, or is accompanied by the report, and complies with the requirements specified by article 59

62 Sale of body corporate

All

Note 1

(1) Made by a company, a partnership, a single individual or a group of connected individuals;

(2) relates to a transaction to acquire or dispose of shares in a company (other than an open-ended investment company) or is entered into for the purposes of such an acquisition or disposal, and

(3) either certain conditions are satisfied or the object of the transaction may reasonably be regarded as being the acquisition of day to day control of the affairs of the company

67 Promotions required or permitted by market rules

Solicited real time Non-real time

Note 4

Financial promotion is required or permitted to be communicated by the rules of the relevant market, a body which regulates the market, or a body which regulates offers or issues of investments to be traded on such a market

70 Promotions in connection with listing applications

Solicited real time Non-real time

Note 1

Financial promotion to which listing rules apply

71-73 Promotions included in listing particulars and prospectuses

Non-real time

Note 1

These articles contain details of exemptions relating to financial promotions included in listing particulars and prospectuses for public offers of listed securities and financial promotions relating to prospectuses for public offers of unlisted securities

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