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

COB 5.5 Information about the firm

Application

COB 5.5.1R
  1. (1)

    This section applies to a firm that conducts designated investment business with or for a private customer.

  2. (2)

    This section does not apply when a firm communicates or approves a financial promotion.

Purpose

COB 5.5.2G

Principle 7 (Communications with clients) requires a firm to pay due regard to the information needs of its clients and communicate information to them in a way that is clear, fair and not misleading. COB 5.5 aims to ensure that a firm provides its private customers with adequate information about the firm.

Information required to be disclosed

COB 5.5.3R

When it conducts designated investment business, a firm must take reasonable steps to ensure that a private customer is given adequate information about:

  1. (1)

    the identity and business address of the firm and any relevant agent of the firm;

  2. (2)

    the identity and status, or relationship with the firm, of employees and other agents with whom the customer may have contact; and

  3. (3)

    the firm's statutory status (in accordance with GEN 4 Annex 1 (Statutory status disclosure));1

unless the private customer has been given the information on a previous occasion and that information is still up to date.

COB 5.5.4E
  1. (1)

    For the purposes of COB 5.5.3 R, the reasonable steps should include the relevant measures detailed in COB 5.5.5 E.

  2. (2)

    Compliance with (1) may be relied as tending to establish compliance with COB 5.5.3 R.

  3. (3)

    Contravention of (1) may be relied as tending to establish contravention of COB 5.5.3 R.

COB 5.5.5E

Table of information to be disclosed in written communications.

This table belongs to COB 5.5.4 E

33331

Written communications

1.

Any written communication, including stationery, business cards or other business documentation published by the firm, or used by its employees, agents, representatives or introducers, should include:3

(a)

the name, business address and telephone number of the firm or of the branch or office of the firm from which the communication originates;

(b)

[deleted]3

(c)

the name and status or relationship with the firm, of the individual from whom the communication originates;

(d)

a statement of the firm's statutory status (in accordance with GEN 4 Annex 1 (Statutory status disclosure));

(e)

[deleted]3

(f)

if the communication is by or relates to an introducer, a statement of the introducer's capacity

2.

[deleted]3

COB 5.5.5AG

Firms are reminded of GEN 4.3 (Letter disclosure), which requires a disclosure in letters to private customers.1

COB 5.5.6G

3[deleted]

Overseas business for UK private customers

COB 5.5.7R
  1. (1)

    A firm must not conduct designated investment business:

    1. (a)

      from an office of its own (or of any appointed representative) outside the United Kingdom;

    2. (b)

      with or for a private customer who is in the United Kingdom;

    unless it has, where relevant, made a disclosure in accordance with (2) to the private customer.

  2. (2)

    The required disclosure in (1) means a written statement making it clear that in some or all respects the regulatory system applying, including any compensation arrangements, will be different from that of the United Kingdom. The statement may also indicate the protections or compensation available under another system of regulation.

  3. (3)

    A firm must not make an introduction or make arrangements or give advice on investments with a view to another person conducting designated investment business;

    1. (a)

      from an office outside the United Kingdom;

    2. (b)

      with or for a private customer (or a person who, if a client, would be a private customer), who is in the United Kingdom;

    unless the firm has, where relevant, made a disclosure in accordance with (2) and there are no reasonable grounds for the firm to doubt that the private customer will be dealt with in an honest and reliable way.1

Business conducted from non-UK offices

COB 5.5.8G

GEN 4.4 (Business for private customers from non-UK offices), requires a firm to give information, similar to that in COB 5.5.7 R, in certain circumstances in connection with business conducted from an office outside the United Kingdom with both UK and non-UK private customers.1

ISD investment firms: compensation information

COB 5.5.9R

1An ISD investment firm providing or offering to provide a core investment service or custody must make available to every client, who has used or intends to use those services, information on whether or not compensation may be available from the compensation scheme or a compensation scheme established in another EEA State in accordance with the Investor Compensation Directive should the firm be unable to meet its liabilities, and the extent and level of cover and how further information can be obtained.2

COB 5.5.10G

1The obligation in COB 5.5.9 R is to "make information available". This does not require the firm to inform every client. A firm may make the information available in a number of ways, for example, by including it in explanatory literature or on the firm's website.

Example of compensation information for a UK domestic investment firm operating from the United Kingdom

COB 5.5.11G

1This is an example of how a UK domestic firm, carrying on a regulated activity from a UK establishment, could present the information required by COB 5.5.9 R:COMPENSATIONWe are covered by the Financial Services Compensation Scheme. You may be entitled to compensation from the scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim. Most types of investment business are covered for 100% of the first £30,000 and 90% of the next £20,000, so the maximum compensation is £48,000. Further information about compensation arrangements is available from the Financial Services Compensation Scheme

ISD investment firms: language of compensation information

COB 5.5.12R

1Information about compensation arrangements made available by an ISD investment firm under COB 5.5.9 Rmust:

  1. (1)

    (if it relates to the activities of an establishment in the United Kingdom) be in English; or

  2. (2)

    (if it relates to the activities of a branch in another EEA State) be in an official language of that EEA State.