COBS 18.5B UCITS management companies

Application

COBS 18.5B.1R

1This section applies to a UCITS management company.

Application or modification of general COBS rules

COBS 18.5B.2R

A firm when it is carrying on scheme management activity:

  1. (1)

    must comply with the COBS rules specified in the table, as modified by this section; and

  2. (2)

    need not comply with any other rule in COBS.

Table: Application of conduct of business rules

Chapter, section, rule

UCITS management company

1 (Application)

Applies

2.1.1 (The client’s best interests rule)

Applies

2.3 (Inducements relating to business other than MiFID, equivalent third country or optional exemption business)

Applies, as modified by COBS 2.3.1AR and COBS 2.3.2AR

2.3B (Inducements and research)

Applies, as modified by COBS 18 Annex 1

2.4 (Agent as client and reliance on others)

Applies

4.2.1R, 4.2.2G and 4.2.3G (The fair, clear and not misleading rule)

Applies

5.2 (E-commerce)

Applies

11.2B (Best execution for UCITS management companies)

Applies

11.3 (Client order handling)

Applies

11.7 (Personal account dealing)

Applies

11 Annex 1EU (Regulatory technical standard 28)

Applies as rules

18.5B (UCITS management companies)

Applies

18 Annex 1 (Research and inducements for collective portfolio managers)

Applies

COBS 18.5B.3G
  1. (1)

    For activities which are not scheme management activity, the COBS rules apply under the general application rule, as modified in COBS 1 Annex 1.

  2. (2)

    This may include, for example, activities relating to the administration and marketing of the scheme.

General modifications

COBS 18.5B.4R

Where COBS rules specified in the table in COBS 18.5B.2R apply to a firm carrying on scheme management activities, the following modifications apply:

  1. (1)

    subject to (2), references to customer or client are to be construed as references to any scheme in respect of which the firm is acting or intends to act; and

  2. (2)

    references to the service of portfolio management in COBS 11.3 (Client order handling) are to be read as references to collective portfolio management.

COBS 18.5B.5G
  1. (1)

    COBS 1.2 (Markets in Financial Instruments Directive) contains modifications to the text of the MiFID Org Regulation where this is applied as rules to firms that are not subject to those provisions directly.

  2. (2)

    These modifications apply to the following sections that are applied in the table in COBS 18.5B.2R:

    1. (a)

      COBS 11.3 (Client order handling); and

    2. (b)

      COBS 11 Annex 1EU (Regulatory technical standard 28).

Research and inducements

COBS 18.5B.6R

A firm must comply with COBS 18 Annex 1 (Research and inducements for collective portfolio managers) when executing orders, or placing orders with other entities for execution, that relate to financial instruments for, or on behalf of, the fund.

Distance marketing

COBS 18.5B.7G

Firms should also be aware that if they are carrying on distance marketing activity from an establishment in the UK, with or for a consumer in the UK or another EEA State, COBS 5.1 applies specific requirements for that activity.