COBS 4.10 Approving and confirming compliance of financial promotions

1. (1)

   Before a firm approves a financial promotion for communication by an unauthorised person, it must confirm that the financial promotion complies with the financial promotion rules.

2. (1A)

   After a firm has complied with (1), and for as long as the financial promotion is communicated, the firm must take reasonable steps to monitor the continuing compliance of that financial promotion with the financial promotion rules.3

   [Note: for the FCA’s guidance on ‘Ongoing monitoring’ see: https://www.fca.org.uk/firms/financial-promotions-and-adverts/approving-financial-promotions]3

3. (1B)

   A firm that has approved a financial promotion issued, and for communication by, an unauthorised person must require from that person, a written quarterly attestation that there has been no material change:3

   1. (a)

      to the financial promotion; or3

   2. (b)

      in circumstances which might affect the continuing compliance of the financial promotion with the financial promotion rules.3

4. (1C)

   For the purpose of (1B), a firm must:3

   1. (a)

      require the first attestation no less than 3 months after it approves the financial promotion; and3

   2. (b)

      thereafter, require attestations at least once every 3 months for as long as the financial promotion is communicated.3

5. (2)

   If, at any time after a firm has complied with (1), a firm becomes aware that a financial promotion no longer complies with the financial promotion rules, it must withdraw its approval and notify any person that it knows to be relying on its approval as soon as reasonably practicable.3

6. (3)

   When approving a financial promotion, the firm must confirm compliance with the financial promotion rules that would have applied if the financial promotion had been communicated by a firm other than in relation to MiFID or equivalent third country business.3

1. (1)

   3This rule applies to a firm that approves:

   1. (a)

      a direct offer financial promotion relating to a restricted mass market investment; or

   2. (b)

      a financial promotion relating to a non-mass market investment,

   for communication to a retail client.

2. (2)

   A firm must take reasonable steps to ensure, on a continuing basis:

   1. (a)

      that the conditions specified in:

      1. (i)

         COBS 4.12A.15R(1)(b) are being satisfied in relation to each communication of the direct offer financial promotion relating to the restricted mass market investment;

      2. (ii)

         COBS 4.12B.10R(2)(b) are being satisfied in relation to each communication of the financial promotion relating to the non-mass market investment; and

   2. (b)

      if the firm will not itself carry out the appropriateness assessment required by COBS 4.12A.28R, that the appropriateness assessments undertaken comply with the rules specified in COBS 4.12A.28R.

3. (3)

   If the firm is not satisfied that the relevant conditions are being satisfied or that the appropriateness assessments undertaken comply with the relevant rules then it must withdraw its approval of the financial promotion in accordance with COBS 4.10.2R(2).

A firm must not approve a financial promotion to be made in the course of a personal visit, telephone conversation or other interactive dialogue.

If a firm approves a financial promotion in circumstances in which one or more of the financial promotion rules, or the prohibition on approval of promotions for collective investment schemes in section 240(1) of the Act (Restriction on approval), are expressly disapplied, the approval must be given on terms that it is limited to those circumstances.

1. (1)

   3A firm must not communicate or approve a financial promotion unless the individual or individuals responsible for the compliance of the financial promotion with the financial promotion rules has or have appropriate competence and expertise.

2. (2)

   Appropriate competence and expertise for the purposes of (1) means competence and expertise in the investment or financial service to which the financial promotion relates. It does not necessarily, for example, require competence or expertise in the day-to-day commercial activities of a company issuing securities for the purposes of raising capital.

3. (3)

   If a firm (A) determines that it lacks appropriate competence and expertise in relation to a financial promotion, it must:

   1. (a)

      have another firm (B) confirm that the financial promotion complies with the financial promotion rules before A communicates that financial promotion; or

   2. (b)

      decline to approve that financial promotion.

4. (4)

   4A registered person is not permitted to confirm the compliance of a financial promotion for the purpose of COBS 4.10.9AR(3).

1. (1)

   3A firm must not confirm the compliance of a financial promotion for the purpose of COBS 4.10.9AR(3)(a) unless:

   1. (a)

      it is satisfied that the financial promotion complies with the financial promotion rules; and

   2. (b)

      the individual or individuals responsible for providing that confirmation has or have appropriate competence and expertise.

2. (2)

   A firm must not confirm the compliance of a financial promotion to be made in the course of a personal visit, telephone conversation or other interactive dialogue.

1. (1)

   A firm (A) will not contravene any of the financial promotion rules if it communicates a financial promotion which has been produced by another person and:

   1. (a)

      A takes reasonable care to establish that another firm (B) has confirmed that the financial promotion complies with the financial promotion rules;

   2. (b)

      A takes reasonable care to establish that it communicates the financial promotion only to recipients of the type for whom it was intended at the time B carried out the confirmation exercise;5

   3. (c)

      so far as A is, or ought reasonably to be, aware:

      1. (i)

         the financial promotion has not ceased to be fair, clear and not misleading since that time; and

      2. (ii)

         B has not withdrawn the financial promotion; and5

   4. (d)

      5A takes reasonable care to establish that B did not breach the approver permission requirement in the context of confirming compliance.

2. (2)

   This rule does not apply in relation to MiFID, equivalent third country or optional exemption business2.

1. (1)

   3This rule applies to a firm that:

   1. (a)

      approves a financial promotion for communication by an unauthorised person; or

   2. (b)

      confirms the compliance of a financial promotion for the purposes of COBS 4.10.9AR(3)(a).

2. (2)

   A firm must take all appropriate steps to identify and to prevent or manage conflicts of interest between the firm, including its managers, employees and appointed representatives (or, where applicable, tied agents), or any person directly or indirectly linked to them by control, and a person for whom the firm:

   1. (a)

      approves a financial promotion; or

   2. (b)

      confirms the compliance of a financial promotion.