which sells, personally recommends or arranges (brings about) for the sale of a packaged product (other than units in a simplified prospectus scheme)7 to a private customer or to the trustees of an occupational pension scheme or to the trustee or operator of a stakeholder pension scheme; or
7which is an operator of a simplified prospectus scheme or which sells, personally recommends or arranges (brings about) for the sale of units in such a scheme to a client, whether or not held within a PEP or an ISA; or
which is a long-term insurer and receives:
which receives a request from a private customer for a retirement quotation in respect of any of the following contracts provided by it:
a free-standing additional voluntary contribution contract;
COB 6.2.21 R (Exceptions from the requirement to provide key features for life policies) and COB 6.2.24 R (Exceptions from the requirement to provide key features for schemes) contain exemptions from the requirement to produce key features in relation to life policies and schemes. For simplified prospectus schemes COB 6.2.35 R (Exceptions from the requirement to provide the simplified prospectus) and COB 6.2.36 R (Exception from the requirement to provide a simplified prospectus: firms offering a funds supermarket service) contain similar exemptions from the requirement to provide a simplified prospectus.7
COB 6.4.3 G to COB 6.4.5 G and COB 6.4.19 R to COB 6.4.20 G set out how the rules apply where packaged products are sold to the trustees of certain occupational pension schemes or to the trustees or operators of stakeholder pension schemes.
COB 6.2.46 R (UCITS Directive: requirement to offer a simplified prospectus for section 264 schemes) and COB 6.2.47 R (Sale of a section 264 scheme by distance contract) apply7 to a firm when it sells, personally recommends or arranges for the sale of a UCITS scheme which is a recognised scheme under section 264 of the Act (Schemes constituted in other EEA States) to a client.7
COB 6.1 to COB 6.5 amplify Principle 7 (Communications with clients), which requires a firm to pay due regard to the information needs of its customers. In the case of packaged products there is a special need to ensure that private customers are supplied with information which will highlight particular packaged product features. This also needs to be achieved in a way which will optimise the private customer's ability to make a comparative analysis of different packaged products. These rules also address a similar information need in relation to cash deposit ISAs, cash deposit CTFs and when a firm enters into a distance contract to accept deposits with a retail customer.46
A product provider or stakeholder pension scheme operator must, for each packaged product which it offers produce key features which, as to design and content, comply with the requirements of COB 6.1, COB 6.2 and COB 6.5.
A firm to which COB 6.4.13 (1) applies must, for each cash deposit ISA or cash deposit CTF it offers, produce the information document required by COB 6.5.42 R or COB 6.5.42A instead of key features. That information document must comply with COB 6.1, COB 6.2 and COB 6.5 as to design and content.46
A firm must ensure that any key features or information document it produces in relation to a packaged product, cash deposit ISA or cash deposit CTF is in writing, whether in printed hard copy or in electronic format, and:56
is produced and presented to at least the same quality and standard as the associated sales or marketing material being used by the firm to promote the packaged product, cash deposit ISA or cash deposit CTF to customers; and6
is separate from any other material given to the customer, unless it is produced for a collective investment scheme, investment trust savings scheme or stakeholder pension scheme; in that case it may be included as part of another item of sales or marketing material, but only if the key features or information document appears with due prominence.2
Separate in COB 6.1.5 R (2) means stand-alone for these purposes. Where key features are produced in hard copy printed format, firms should, in complying with COB 6.1.5 R, have particular regard to the quality of paper, the type size and the use of colour printing. Where an electronic format is used, the firm should pay regard to the design and appearance of the key features screens, as compared to other screens being used to promote the product. Where key features are permitted to be included within another item, the need for due prominence is unlikely to be satisfied if they are hidden away at the end, or are produced in such small type that their impact on the reader is likely to be materially less than other parts of the document or series of screens.