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Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.

You are viewing the version of the document as on 2011-04-29.

Status: In this content, we have included all amendments made by EU exit-related instruments up to end September 2020. There will be more amendments to be made later this year, further to the September QCP.

COBS 13.4 Contents of a key features illustration

COBS 13.4.1RRP

1 A key features illustration must include appropriate charges information and, if it is a packaged product which is not a financial instrument:

  1. (1)

    must include a standardised deterministic projection;

  2. (2)

    the projection and charges information must be consistent with each other ;

  3. (3)

    it may also include alternative projections except that the most prominent projection must be a standardised deterministic projection.

Exceptions

COBS 13.4.2RRP

A key features illustration must not include a generic projection unless:

  1. (1)

    there are reasonable grounds for believing that that projection will be sufficient to enable a retail client to make an informed decision about whether to invest; or

  2. (2)

    it is a direct offer financial promotion.

COBS 13.4.3GRP

A generic projection is unlikely to be sufficient to enable a retail client to make an informed decision about whether to invest if the premium or investment returns on the product will be materially affected by the personal characteristics of the investor.

COBS 13.4.4RRP

There is no requirement to include a projection in a key features illustration:

  1. (1)

    for a single premium life policy bought as a pure investment product, a product with benefits that do not depend on future investment returns or any other product if it is reasonable to believe that a retail client will not need one to be able to make an informed decision about whether to invest; or

  2. (2)

    if the product is:

    1. (a)

      a SIPP from which no income withdrawals are being taken (but if the SIPP is being used to contract out of the State Second Pension, the key features illustration must include a projection for an appropriate personal pension and a contracting-out comparison, for those benefits)2; or

    2. (b)

      a life policy that will be held in a CTF or sold with basic advice (unless the policy is a stakeholder pension scheme).

COBS 13.4.5GRP

Although there may be no obligation to include a projection in a key features illustration, where a firm chooses to include one, the projection must follow the appropriate requirements, as outlined in this section, or for financial instruments under COBS 4.6.7 R.