COBS 9.1 Application and purpose provisions
Application
1This chapter applies to a firm which:4
- (a)
4makes a personal recommendation to a retail client in relation to a designated investment;
- (b)
4manages investments of a retail client of the firm;
- (c)
4manages the assets of an occupational pension scheme, stakeholder pension scheme or personal pension scheme,4other than in relation to its MiFID, equivalent third country or optional exemption business.
4COBS 9A contains suitability requirements which apply in respect of a firm’s MiFID, equivalent third country or optional exemption business involving the provision of investment advice or portfolio management.
Providing basic advice on a stakeholder product
If a firm makes a personal recommendation in relation to a stakeholder product, other than in the course of MiFID or equivalent third country business, it may choose to give basic advice under the rules in section 9.6 of this chapter instead of the rules in the remainder of this chapter.
P2P agreements
3This chapter does not apply to a firm which manages investments when that firm takes a decision to trade for a client and that decision relates to a P2P agreement. This is because the regulated activity of managing investments does not extend to the management of assets where those assets are P2P agreements.
Life policies for professional clients
If the firm makes a personal recommendation to a professional client to take out a life policy, this chapter applies, but4 only those rules which implement the requirements of the Insurance Mediation Directive.
If a rule implements a requirement of the Insurance Mediation Directive, a Note follows the rule indicating which provision is being implemented. COBS 7 (Insurance mediation) contains further rules implementing the Insurance Mediation Directive.
The effect of these application rules and the fact that the Insurance Mediation Directive does not apply to an insurer (unless it is involved in mediation activities) is that this chapter does not apply to an insurer when it is making a personal recommendation to a professional client to take out a life policy.
Related rules
For a firm making personal recommendations in relation to
pensions, COBS 19 contains additional provisions relevant to assessing suitability and the contents of suitability reports.