COBS 3.1 Application
Scope
This chapter relates to parts of the Handbook whose application depends on whether a person is a client, a retail client, a professional client or an eligible counterparty. However, it does not apply to the extent that another part of the Handbook provides for a different approach to client categorisation. For example, a separate approach to client categorisation is set out in the definition of a retail client for a firm that gives basic advice2.
The sections in this chapter on general notifications (COBS 3.3) and policies, procedures and records (COBS 3.8) do not apply in relation to a firm that is neither:
- (1)
conducting designated investment business; nor
- (2)
in the case of MiFID or equivalent third country business providing an ancillary service that does not constitute designated investment business.
Mixed business
If a firm conducts business for a client involving both:
- (1)
- (2)
other regulated activities subject to this chapter;
it must categorise that client for such business in accordance with the provisions in this chapter that apply to MiFID or equivalent third country business.
- (1)
For example, the requirement concerning mixed business will apply if a MiFID investment firm advises a client on whether to invest in a scheme or a life policy. This is because the former is within the scope of MiFID and the latter is not. In such a case, the MiFID client categorisation requirements prevail.
- (2)
The requirement does not apply where the MiFID or equivalent third country business is provided separately from the other regulated activities. Where this is the case, in accordance with Principle 7 (communications with clients) the basis on which the different activities will be performed, including any differences in the categorisations that apply, should be made clear to the client.