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COBS 13.3 Contents of a key features document

General requirements

COBS 13.3.1R

A key features document must:

  1. (1)

    include enough information about the nature and complexity of the product, how it works, any limitations or minimum standards that apply and the material benefits and risks of buying or investing for a retail client to be able to make an informed decision about whether to proceed; and

  2. (2)

    explain:

    1. (a)

      the arrangements for handling complaints about the product;

    2. (b)

      that compensation might be available from the FSCS if the firm cannot meet its liabilities in respect of the product (if applicable);

    3. (c)

      that a right to cancel or withdraw exists, or does not exist, and, if it does exist, its duration and the conditions for exercising it, including information about the amount a client may have to pay if the right is exercised, the consequences of not exercising it and practical instructions for exercising it, indicating the address to which any notice must be sent;

    4. (d)

      (for a CTF) that stakeholder CTFs, cash-deposit CTFs and 1security-based CTFs1 are available and which type the firm is offering; and

    5. (e)

      (for a personal pension scheme that is not an automatic enrolment scheme)2 clearly and prominently, that stakeholder pension schemes are generally available and might meet the client's needs as well as the scheme on offer.

COBS 13.3.1AG

6When preparing a key features document for pension annuity and drawdown pension options firms should consider the information requirements for firms communicating with clients about their pension decumulation product options in COBS 19.4.12R and COBS 19.4.14R.

Additional requirements for packaged products

COBS 13.3.2R

Table

A key features document for a packaged product must:

(1)

Include the title: ‘key features of the [name of product]’;

(2)

describe the product in the order of the following headings, and by giving the following information under those headings:

Heading

Information to be given

‘Its aims’

A brief description of the product’s aims

‘Your commitment’ or ‘Your investment’

What a retail client is committing to or investing in and any consequences of failing to maintain the commitment or investment

‘Risks’

The material risks associated with the product, including a description of the factors that may have an adverse effect on performance or are material to the decision to invest

‘Questions and Answers’

(in the form of questions and answers) the principle terms of the product, what it will do for a retail client and any other information necessary to enable a retail client to make an informed decision.

5[Note: in respect of ‘Risks’, article 185(4) of the Solvency II Directive]

Money market funds

COBS 13.3.3R

3A key features document for a short-term money market fund, a money market fund or a qualifying money market fund must include a statement identifying it as such a fund and a statement that the authorised fund's investment objectives and policies will meet the conditions of the definition of short-term money market fund, money market fund or qualifying money market fund, as appropriate.

Feeder NURS

COBS 13.3.4R

4A key features document for a feeder NURS must include:

  1. (1)

    a statement identifying it as such a scheme;

  2. (2)

    information specific to the feeder NURS and its qualifying master scheme which enables investors to understand the qualifying master scheme's key particulars; and

  3. (3)

    a description and explanation of any material differences between the risk profile of the feeder NURS and that of the qualifying master scheme.

COBS 13.3.5G

4When producing the key features document, the authorised fund manager of the feeder NURS should have due regard to the provisions in COLL 4.6.8 R (Contents of the simplified prospectus) in terms of additional information appropriate to a feeder NURS and its qualifying master scheme. In particular, the appropriate charges information required by COBS 13.4.1 R and COBS 13 Annex 3 (Charges) should represent the aggregate of the charges of the feeder NURS and its qualifying master scheme as disclosed in the feeder NURS' most up-to-date prospectus.