COBS 22.4 Prohibition on the retail marketing, distribution and sale of derivative contracts of a binary or other fixed outcomes nature
Application
1This section applies to:
- (1)
MiFID investment firms, with the exception of collective portfolio management investment firms; and
- (2)
in relation to the marketing, distribution or sale of investments specified in articles 85(4A) and 85(4B) of the Regulated Activities Order in or from the United Kingdom to a retail client.
1 Firms are reminded that the Glossary definition of MiFID investment firm includes CRD credit institutions when those institutions are providing an investment service or activity.
2 Persons (including unauthorised persons) who benefit from a temporary exemption or exclusion from the general prohibition under:
- (1)
Part 7 of the EU Exit Passport Regulations; or
- (2)
Part 4 of the Electronic Commerce and Solvency 2 (Amendment etc.) (EU Exit) Regulations 2019 (SI 2019/1361)
are required to comply with the rules in this section as a consequence of:
- (3)
regulation 59 of the EU Exit Passport Regulations; or
- (4)
regulation 19 of the Electronic Commerce and Solvency 2 (Amendment etc.) (EU Exit) Regulations 2019.
1For the avoidance of doubt, in COBS 22.4.1R, “marketing” includes communicating and/or approving financial promotions, and “distribution or sale” includes dealing in relation to investments specified in articles 85(4A) and 85(4B) of the Regulated Activities Order.
Prohibitions
- (1)
- (a)
sell an investment specified in articles 85(4A) and 85(4B) of the Regulated Activities Order to a retail client; or
- (b)
distribute an investment specified in articles 85(4A) and 85(4B) of the Regulated Activities Order to a retail client; or
- (c)
market an investment specified in articles 85(4A) and 85(4B) of the Regulated Activities Order if the marketing is addressed to or disseminated in such a way that it is likely to be received by a retail client.
- (a)
- (2)
“Marketing” includes, but is not limited to, communicating and/or approving financial promotions.