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Status: You are viewing the version of the handbook as on 2005-06-30.

SIFA 9.1 Introduction

SIFA 9.1.1G

Our Conduct of Business sourcebook (COB) provides the rules that authorised firms must comply with in the conduct of their business.

SIFA 9.1.2G

This part of the Overview covers the rules that IFA firms carrying on typical financial advisory business will encounter most frequently.

SIFA 9.1.3G

Some IFA firms will have a permission that includes other activities. For these firms other parts of COB will also be relevant but are not discussed further in this Overview. For example:

  1. (1)

    Managing investments:COB 7 Dealing and managing COB 8 Reporting to customers

  2. (2)

    Holding client money: COB 9 Client assets (but see section 9.16 of this Overview)

SIFA 9.1.4G

COB 8.1 requires firms to send written confirmation to clients promptly after each transaction. This requirement will not usually apply to IFAs in view of the exceptions at COB 8.1.6 R.

Exclusion of liability

SIFA 9.1.5G

COB 2.5 applies to a firm that makes any written or oral communication to a customer in the course of, or in connection with, its designated investment business. It covers how firms should handle the duties and liabilities that they have to their customers.

SIFA 9.1.6G

COB 2.5.3 R states that a firm must not, in any written or oral communication, seek to exclude or restrict, or to rely on any exclusion or restriction of, any duty or liability it may have to a customer under the regulatory system.

SIFA 9.1.7G

COB 2.5.4 R states that a firm must not in any written or oral communication to a private customer seek to exclude or restrict, or to rely on any exclusion or restriction of, any duty or liability not referred to in COB 2.5.3 R unless it is reasonable for it to do so.

Reliance on others

SIFA 9.1.8G

Principle 2 requires a firm to conduct its business with due skill, care and diligence. COB 2.3 indicates the extent to which firms can meet this requirement by relying on others.

SIFA 9.1.9G

A firm will be taken to be in compliance with any rule in COB that requires a firm to obtain information to the extent that the firm can show that it was reasonable for the firm to rely on information provided to it in writing by another person ( COB 2.3.3 R).

SIFA 9.1.10G

You may generally rely on another authorised person not connected with your firm to provide you with information in writing to meet your own obligations to obtain information, and vice versa (COB 2.3.5 G). 'In writing includes the use of electronic media to make communications (GEN 2.2.14 R). Additional guidance on electronic communication is given at COB 1.8.2 G.