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COB 4 Annex 3 1Terms of business content - managing investments

COB 4 Annex 3.1E

1Content of terms of business provided to a customer: managing investments on a discretionary basis

This table belongs to COB 4.2.11 E.

Managing investments on a discretionary basis

Additional contents in respect of discretionary management

In respect of discretionary management, terms of business (including a client agreement) provided to a customer should, in addition, include some provision about each of:


Extent of discretion


the extent of the discretion to be exercised by the firm, including any restrictions on:


the value of any one investment; and


the proportion of the portfolio which any one investment or any particular kind of investment may constitute; or


that there are no such restrictions.


Periodic statements


The frequency of any periodic statements, except when a periodic statement is not required by COB 8.2.7 (Promptness, suitable intervals and adequate information); and


whether those statements will include some measure of performance, and if so, what the basis of that measurement will be.



The basis on which assets comprised in the portfolio are to be valued.



That the firm may commit the customer to supplement the funds in the portfolio, including borrowing on his behalf, if this is the case, and, if it may:


the circumstances in which the firm may do so;


whether there are any limits on the extent to which the firm may do so and, if so, what those limits are; and


any circumstances in which such limits may be exceeded.


Underwriting commitments

If it is the case, that the firm may commit the customer to any obligation to underwrite or sub-underwrite any issue or offer for sale of securities, and:


whether there are any restrictions on the categories of securities which may be underwritten and, if so, what these restrictions are; and


whether there are any financial limits on the extent of the underwriting and, if so, what these limits are.