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

COB 7.14 Programme trading

Application

COB 7.14.1G

This section applies to a firm when it executes a programme trade that includes one or more designated investments. The term 'programme trade' is used in this section to describe a single transaction or series of transactionsexecuted for the purpose of acquiring or disposing, for a customer, of all or part of a portfolio or a large basket of securities.

Purpose

COB 7.14.2G

Principle 6 (Customers' interests) requires a firm to pay due regard to the interests of its customers and treat them fairly. This section provides guidance on the steps a firm should take when executing a programme trade, either as principal or agent, whenever a customer is involved.

Programme trading

COB 7.14.3G

Before a firmexecutes a programme trade, it should disclose to its customer whether it will be acting as a principal or agent, unless the customer has given prior notification that no such notice is required. A firm should not subsequently act in a different capacity from that which is disclosed without the prior consent of the customer.

COB 7.14.4G

A firm should ensure that neither it, nor an associate, executes an own account transaction in any designated investment included in a programme trade, unless the firm has notified the customer in advance that it may do this, or can otherwise demonstrate that it has provided fair treatment to the customer concerned.

COB 7.14.5G

COB 7.5.6 E (1)(e) (Providing best execution) provides that a firm should ensure that it applies the duty of care in COB 7.5.5 R (1) (Providing best execution) to each individual transaction executed as part of a programme trade, subject to the exceptions in COB 7.5.4 R (Exceptions).