Related provisions for COBS 20.2.57

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COBS 11.7.1RRP
A firm that conducts designated investment business must establish, implement and maintain adequate arrangements aimed at preventing the following activities in the case of any relevant person who is involved in activities that may give rise to a conflict of interest, or who has access to inside information as defined in the Market Abuse Regulation3 or to other confidential information relating to clients or transactions with or for clients by virtue of an activity carried out
COBS 11.7.2RRP
For the purposes of this section, the relevant provisions are:(1) the rules on personal transactions undertaken by financial analysts in COBS 12.2.5 R (1) and (2);(2) the rule on the misuse of information relating to pending client orders in COBS 11.3.5 R.
COBS 11.7.2AGRP
1The requirements of this section are without prejudice to the prohibition under article 14(c)3 of the Market Abuse Regulation3.
COBS 11.7.3GRP
For the purposes of COBS 11.7.1R (1)(c), any other obligation of the firm under MiFID refers to a firm's obligations under the regulatory system that are not owed to a customer and any of the firm's obligations under another EEA States' implementation of MiFID where it operates a branch in the EEA.
COBS 11.7.4RRP
The arrangements required under this section must in particular be designed to ensure that:(1) each relevant person covered by this section is aware of the restrictions on personal transactions, and of the measures established by the firm in connection with personal transactions and disclosure, in accordance with this section;(2) the firm:(a) is informed promptly of any personal transaction entered into by a relevant person, either by notification of that transaction or by other
COBS 11.7.5RRP
This section does not apply to the following kinds of personal transaction:(1) personal transactions effected under a discretionary portfolio management service where there is no prior communication in connection with the transaction between the portfolio manager and the relevant person or other person for whose account the transaction is executed;(2) personal transactions in units or shares in collective undertakings that comply with the conditions necessary to enjoy the rights
COBS 11.7.6RRP
For the purposes of this section, a person who is not:(1) a director, partner or equivalent, manager or appointed representative (or, where applicable, a tied agent) of the firm; or(2) a director, partner or equivalent, or manager of any appointed representative (or where applicable, a tied agent) of the firm;will only be a relevant person to the extent that they are involved in the provision of designated investment business or collective portfolio management services.2
COBS 11.7.7RRP
Where successive personal transactions are carried out on behalf of a person in accordance with prior instructions given by that person, the obligations under this section do not apply:(1) separately to each successive transaction if those instructions remain in force and unchanged; or(2) to the termination or withdrawal of such instructions, provided that any financial instruments which had previously been acquired pursuant to the instructions are not disposed of at the same
COBS 4.12.3RRP
(1) 3A firm must not communicate or approve an invitation or inducement to participate in, acquire, or underwrite a non-mainstream pooled investment where that invitation or inducement is addressed to or disseminated in such a way that it is likely to be received by a retail client. (2) The restriction in (1) is subject to COBS 4.12.4 R and does not apply to units in unregulated collective investment schemes, which are subject to a statutory restriction on promotion in section
COBS 4.12.4RRP
  1. (1)

    3The restriction in COBS 4.12.3 R does not apply if the promotion falls within an exemption in the table in (5) below.

  2. (2)

    A firm may communicate an invitation or inducement to participate in an unregulated collective investment scheme without breaching the restriction on promotion in section 238 of the Act if the promotion falls within an exemption in the table in (5) below.

  3. (3)

    Where the middle column in the table in (5) refers to promotion to a category of person, this means that the invitation or inducement:

    1. (a)

      is made only to recipients who the firm has taken reasonable steps to establish are persons in that category; or

    2. (b)

      is directed at recipients in a way that may reasonably be regarded as designed to reduce, so far as possible, the risk of participation in, acquisition or underwriting of the non-mainstream pooled investment by persons who are not in that category.

  4. (4)

    A firm may rely on more than one exemption in relation to the same invitation or inducement.

  5. (5)

    Title of Exemption

    Promotion to:

    Promotion of a non-mainstream pooled investment which is:

    1. Replacement products and rights issues

    A person who already participates in, owns, holds rights to or interests in, a non-mainstream pooled investment that is being liquidated or wound down or which is undergoing a rights issue. [See Note 1.]

    1. A non-mainstream pooled investment which is intended by the operator or manager to absorb or take over the assets of that non-mainstream pooled investment, or which is being offered by the operator or manager of that non-mainstream pooled investment as an alternative to cash on its liquidation;

    or

    2. Securities offered by the existing non-mainstream pooled investment as part of a rights issue.

    2. Certified high net worth investors

    An individual6 who meets the requirements set out in COBS 4.12.6 R, or a person (or persons) legally empowered to make investment decisions on behalf of such individual6.

    Any non-mainstream pooled investment the firm considers is likely to be suitable for that individual6, based on a preliminary assessment of the client's profile and objectives.

    [See COBS 4.12.5G (2).]

    3. Enterprise and charitable funds

    A person who is eligible to participate or invest in an arrangement constituted under:

    (1) the Church Funds Investment Measure 1958;

    (2) section 96 5or 100 of the Charities Act 2011;

    (3) section 25 of the Charities Act (Northern Ireland) 1964;

    (4) the Regulation on European Venture Capital Funds (‘EuVECAs’); or

    (5) the Regulation on European Social Entrepreneurship Funds (‘EuSEFs’).

    Any non-mainstream pooled investment which is such an arrangement.

    4. Eligible employees

    An eligible employee, that is, a person who is:

    (1) an officer;

    (2) an employee;

    (3) a former officer or employee; or

    (4) a member of the immediate family of any of (1) - (3), of an employer which is (or is in the same group as) the firm, or which has accepted responsibility for the activities of the firm in carrying out the designated investment business in question.

    1. A non-mainstream pooled investment, the instrument constituting which:

    A. restricts the property of the non-mainstream pooled investment, apart from cash and near cash, to:

    (1) (where the employer is a company) shares in and debentures of the company or any other connected company; [See Note 2.]

    (2) (in any case), any property, provided that the non-mainstream pooled investment takes the form of:

    (i) a limited partnership, under the terms of which the employer (or connected company) will be the unlimited partner and the eligible employees will be some or all of the limited partners; or

    (ii) a trust which the firm reasonably believes not to contain any risk that any eligible employee may be liable to make any further payments (other than charges) for investment transactions earlier entered into, which the eligible employee was not aware of at the time he entered into them; and

    B. (in a case falling within A(1) above) restricts participation in the non-mainstream pooled investment to eligible employees, the employer and any connected company.

    2. Any non-mainstream pooled investment, provided that the participation of eligible employees is to facilitate their co-investment:

    (i) with one or more companies in the same group as their employer (which may include the employer); or

    (ii) with one or more clients of such a company.

    5. Members of the Society of Lloyd’s

    A person admitted to membership of the Society of Lloyd's or any person by law entitled or bound to administer his affairs.

    A scheme in the form of a limited partnership which is established for the sole purpose of underwriting insurance business at Lloyd's.

    6. Exempt persons

    An exempt person (other than a person exempted only by section 39 of the Act (Exemption of appointed representatives)) if the financial promotion relates to a regulated activity in respect of which the person is exempt from the general prohibition.

    Any non-mainstream pooled investment.

    7. Non-retail clients

    An eligible counterparty or a professional client.

    Any non-mainstream pooled investment in relation to which the client is categorised as a professional client or eligible counterparty.

    [See Note 4.]

    8. Certified sophisticated investors

    An individual6 who meets the requirements set out in COBS 4.12.7 R, including an individual who is legally empowered (solely or jointly with others) to make investment decisions on behalf of another person who is the firm'sclient6.

    Any non-mainstream pooled investment.

    9. Self-certified sophisticated investors

    An individual6 who meets the requirements set out in COBS 4.12.8 R, including an individual who is legally empowered (solely or jointly with others) to make investment decisions on behalf of another person who is the firm'sclient6.

    Any non-mainstream pooled investment the firm considers is likely to be suitable for that client, based on a preliminary assessment of the client's profile and objectives.

    [See COBS 4.12.5G (2)]

    10. Solicited advice

    Any person.

    Any non-mainstream pooled investment, provided the communication meets all of the following requirements:

    (a) the communication only amounts to a financial promotion because it is a personal recommendation on a non-mainstream pooled investment;

    (b) the personal recommendation is made following a specific request by that client for advice on the merits of investing in the non-mainstream pooled investment; and

    (c) the client has not previously received a financial promotion or any other communication from the firm (or from a person connected to the firm) which is intended to influence the client in relation to that non-mainstream pooled investment. [See Note 3.]

    11. Excluded communications

    Any person.

    Any non-mainstream pooled investment, provided the financial promotion is an excluded communication.

    [See COBS 4.12.12 G and COBS 4.12.13 G.]

    12. Non-recognised UCITS

    Any person.

    Any EEA UCITS scheme which is not a recognised scheme, provided the following requirements are met:

    (1) the firm considers it is likely to be suitable for that client based on a preliminary assessment of the client's profile and objectives; and

    (2) the firm provides that client with the same product information as it would be required to provide by COBS 14.2 if the scheme was a recognised scheme.

    [See COBS 4.12.5G (2).]

    13. US persons

    A person who is classified as a United States person for tax purposes under United States legislation or who owns a US qualified retirement plan.

    Any investment company registered and operated in the United States under the Investment Company Act 1940.

    The following Notes explain certain words and phrases used in the table above.

    Note 1

    Promotion of non-mainstream pooled investments to a category of person includes any nominee company acting for such a person.

    Note 2

    A company is 'connected' with another company if:

    • they are both in the same group; or
    • one company is entitled, either alone or with another company in the same group, to exercise or control the exercise of a majority of the voting rights attributable to the share capital, which are exercisable in all circumstances at any general meeting of the other company or of its holding company.

    Note 3

    A person is connected with a firm if it acts as an introducer or appointed representative for that firm or if it is any other person, regardless of authorisation status, who has a relevant business relationship with the firm.

    Note 4

    In deciding whether a promotion is permitted under the rules of this section or under section 238 of the Act, firms may use the client categorisation regime that applies to business other than MiFID or equivalent third country business. (This is the case even if the firm will be carrying on a MiFID activity at the same time as or following the promotion.)
COBS 4.12.5GRP
(1) 3Where a firm communicates any promotion of a non-mainstream pooled investment in the context of advice, it should have regard to and comply with its obligations under COBS 9. Firms should also be mindful of the appropriateness requirements in COBS 10 which apply to a wide range of non-advised services.(2) (a) A firm which wishes to rely on exemptions 2 (certified high net worth investors), 9 (self-certified sophisticated investors) or 12 (non-recognised UCITS), as provided
COBS 4.12.6RRP
3A certified high net worth investor is an individual who has signed, within the period of twelve months ending with the day on which the communication is made, a statement in the following terms:“HIGH NET WORTH INVESTOR STATEMENTI make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as
COBS 4.12.7RRP
A certified sophisticated investor is an individual:(1) who has a written certificate signed within the last 36 months by a firm confirming he has been assessed by that firm as sufficiently knowledgeable to understand the risks associated with engaging in investment activity in non-mainstream pooled investments; and(2) who has signed, within the period of twelve months ending with the day on which the communication is made, a statement in the following terms:“SOPHISTICATED INVESTOR
COBS 4.12.8RRP
3A self-certified sophisticated investor is an individual who has signed, within the period of twelve months ending with the day on which the communication is made, a statement in the following terms:“SELF-CERTIFIED SOPHISTICATED INVESTOR STATEMENTI declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:(i) I can receive promotional communications made by a person
COBS 4.12.9GRP
(1) 3A firm which wishes to rely on any of the certified high net worth investor exemptions (see Part I of the Schedule to the Promotion of Collective Investment Schemes Order, Part I of Schedule 5 to the Financial Promotions Order and COBS 4.12.6 R) should have regard to its duties under the Principles and the client's best interests rule. In particular, the firm should take reasonable steps to ascertain that the retail client does, in fact, meet the income and net assets criteria
COBS 4.12.10GRP
(1) 3A firm which is asked to or proposes to assess and certify a retail client as a certified sophisticated investor (see article 23 of the Promotion of Collective Investment Schemes Order, article 50 of the Financial Promotions Order and COBS 4.12.7 R) should have regard to its duties under the Principles and the client's best interests rule. In particular, the firm should carry out that assessment with due skill, care and diligence, having regard to the generally complex nature
COBS 4.12.11GRP
(1) 3A firm which wishes to rely on any of the self-certified sophisticated investor exemptions (see Part II of the Schedule to the Promotion of Collective Investment Schemes Order, Part II of Schedule 5 to the Financial Promotions Order and COBS 4.12.8 R) should have regard to its duties under the Principles and the client's best interests rule. In particular, the firm should consider whether the promotion of the non-mainstream pooled investment is in the interests of the client
COBS 4.12.12GRP
(1) 3A firm which wishes to rely on one of the one-off promotion exemptions provided by the Promotion of Collective Investment Schemes or the Financial Promotion Order to promote a non-mainstream pooled investment to a retail client should have regard to its duties under the Principles and the client's best interests rule. In particular, the firm should consider whether the promotion of the non-mainstream pooled investment is in the interests of the client and whether it is fair
COBS 4.12.13GRP
(1) 3A firm which wishes to rely on the excluded communications exemption in COBS 4.12.4R (5) to promote units in a qualified investor scheme to a retail client should have regard to its duties under the Principles and the client's best interests rule. (2) As explained in COLL 8.1, qualified investor schemes are intended only for professional clients and retail clients who are sophisticated investors. Firms should note that, in the FCA's view, promotion of units in a qualified
COBS 4.12.14GRP
7In this section: (1) any requirement that a document is signed may be satisfied by an electronic signature or electronic evidence of assent; and(2) any references to writing should be construed in accordance with GEN 2.2.14R and its related guidance provisions.
COBS 2.4.1RRP
This section applies to a firm that is conducting designated investment business or ancillary activities or, in the case of MiFID or equivalent third country business, other ancillary services.
COBS 2.4.2GRP
This section is not relevant to the question of who is the firm's counterparty for prudential purposes and it does not 2affect any obligation a firm may owe to any other person under the general law.
COBS 2.4.3RRP
(1) If a firm (F) is aware that a person (C1) with or for whom it is providing services is acting as agent for another person (C2) in relation to those services, C1, and not C2, is the client of F in respect of that business.(2) Paragraph (1) does not apply if:(a) F has agreed with C1 in writing to treat C2 as its client; or(b) C1 is neither a firm nor an overseas financial services institution1 and the main purpose of the arrangements between the parties is the avoidance of duties
COBS 2.4.4RRP
(1) This rule applies if a firm (F1), in the course of performing MiFID or equivalent third country business, receives an instruction to perform an investment or ancillary service on behalf of a client (C) through another firm (F2), if F2 is:(a) a MiFID investment firm or a third country investment firm; or(b) an investment firm that is:(i) a firm or authorised in another EEA State; and(ii) subject to equivalent relevant requirements.(2) F1 may rely upon:(a) any information about
COBS 2.4.5GRP
(1) If F1 is required to perform a suitability assessment or an appropriateness assessment under COBS 9 or COBS 10, it may rely upon a suitability assessment performed by F2, if F2 was subject to the requirements for assessing suitability in COBS 9 (excluding the basic advicerules) or equivalent requirements in another EEA State in performing that assessment.(2) If F1 is required to perform an appropriateness assessment under COBS 10, it may rely upon an appropriateness assessment
COBS 2.4.6RRP
(1) This rule applies if the rule on reliance on other investment firms (COBS 2.4.4 R) does not apply.(2) A firm will be taken to be in compliance with any rule in this sourcebook that requires it to obtain information to the extent it can show it was reasonable for it to rely on information provided to it in writing by another person.
COBS 2.4.7ERP
(1) In relying on COBS 2.4.6 R, a firm should take reasonable steps to establish that the other person providing written information is not connected with the firm and is competent to provide the information.(2) Compliance with (1) may be relied upon as tending to establish compliance with COBS 2.4.6 R.(3) Contravention of (1) may be relied upon as tending to establish contravention of COBS 2.4.6 R.
COBS 2.4.8GRP
It will generally be reasonable (in accordance with COBS 2.4.6R (2)) for a firm to rely on information provided to it in writing by an unconnected authorised person or a professional firm, unless it is aware or ought reasonably to be aware of any fact that would give reasonable grounds to question the accuracy of that information.
COBS 2.4.9RRP
Any information that a rule in COBS or CASS requires to be sent to a client may be sent to another person on the instruction of the client so long as the recipient is not connected to the firm.
COBS 2.4.10RRP
In the case of business that is not MiFID or equivalent third country business, if a rule in COBS or CASS requires information to be sent to a client, a firm need not send that information so long as it takes reasonable steps to establish that it has been or will be supplied by another person.
COBS 10.2.1RRP
(1) When providing a service to which this chapter applies, a firm must ask the client to provide information regarding his knowledge and experience in the investment field relevant to the specific type of product or service offered or demanded so as to enable the firm to assess whether the service or product envisaged is appropriate for the client.(2) When assessing appropriateness, a firm:(a) must determine whether the client has the necessary experience and knowledge in order
COBS 10.2.2RRP
The information regarding a client's knowledge and experience in the investment field includes, to the extent appropriate to the nature of the client, the nature and extent of the service to be provided and the type of product or transaction envisaged, including their complexity and the risks involved, information on:(1) the types of service, transaction and designated investment with which the client is familiar;(2) the nature, volume, frequency of the client's transactions in
COBS 10.2.3RRP
A firm must not encourage a client not to provide information required for the purposes of its assessment of appropriateness. [Note: article 37(2) of the MiFID implementing Directive]
COBS 10.2.4RRP
A firm is entitled to rely on the information provided by a client unless it is aware that the information is manifestly out of date, inaccurate or incomplete. [Note: article 37(3) of the MiFID implementing Directive]
COBS 10.2.5GRP
When assessing appropriateness, a firm may use information it already has in its possession.
COBS 10.2.6GRP
Depending on the circumstances, a firm may be satisfied that the client's knowledge alone is sufficient for him to understand the risks involved in a product or service. Where reasonable, a firm may infer knowledge from experience.
COBS 10.2.7GRP
If, before assessing appropriateness, a firm seeks to increase the client's level of understanding of a service or product by providing information to him, relevant considerations are likely to include the nature and complexity of the information and the client's existing level of understanding.
COBS 10.2.8GRP
If a firm is satisfied that the client has the necessary experience and knowledge in order to understand the risks involved in relation to the product or service, there is no duty to communicate this to the client. If the firm does so, it must not do so in a way that amounts to making a personal recommendation unless it complies with the rules in COBS 9 on suitability.
COBS 3.6.1RRP
(1) An eligible counterparty is a client that is either a per se eligible counterparty or an elective eligible counterparty.(2) A1client can only be an eligible counterparty in relation to eligible counterparty business (PRIN 1 Annex 1 R is an exception to this).1 [Note: article 24(1) of MiFID]
COBS 3.6.2RRP
Each of the following is a per se eligible counterparty (including an entity that is not from an EEA State3 that is equivalent to any of the following) unless and to the extent it is given a different categorisation under this chapter:(1) an investment firm;(2) a credit institution;(3) an insurance company;(4) a collective investment scheme authorised under the UCITS Directive or its management company;(5) a pension fund or its management company;(6) another financial institution
COBS 3.6.3GRP
For the purpose of COBS 3.6.2 R (6), a financial institution includes regulated institutions in the securities, banking and insurance sectors.
COBS 3.6.4RRP
A firm may treat a client as an elective eligible counterparty if:(1) the client is an undertaking and:(a) is a per se professional client (except for a client that is only a per se professional client because it is an institutional investor under COBS 3.5.2 R (5)) and, in relation to business other than MiFID or equivalent third country business:1(i) is a body corporate (including a limited liability partnership) which has (or any of whose holding companies or subsidiaries has)
COBS 3.6.5GRP
The categories of elective eligible counterparties include an equivalent undertaking that is not from an EEA State provided the above conditions and requirements are satisfied.
COBS 3.6.6RRP
A firm may obtain a prospective counterparty's confirmation that it agrees to be treated as an eligible counterparty either in the form of a general agreement or in respect of each individual transaction. [Note: second paragraph of article 24(3) of MiFID]
COBS 3.6.7RRP
In the case of MiFID or equivalent third country business, in the event of a transaction where the prospective counterparties are located in different EEA States, the firm shall defer to the status of the other undertaking as determined by the law or measures of the EEA State in which that undertaking is established. [Note: first paragraph of article 24(3) of MiFID]
COBS 21.2.1RRP
For the purposes of determining policyholder benefits, a1firm must ensure that the values of its permitted links are determined fairly and accurately.1
COBS 21.2.1ARRP
1An insurer must not contract to provide benefits under linked long-term contracts of insurance that are determined wholly or partly, directly or indirectly, by reference to fluctuations in any index or wholly or partly by reference to the value of, or the income from, or fluctuations in the value of, property other than in accordance with the rules in this section.
COBS 21.2.1BGRP
1Insurers other than EEAinsurers effecting linked long-term contracts of insurance are obliged to comply with the requirements on investments in the PRA Rulebook Solvency II Firms Investments.
COBS 21.2.4RRP
A firm must notify its linked policyholders of the risk profile and investment strategy for the linked fund:(1) at inception, and(2) before making any material changes.
COBS 21.2.4ARRP
1A firm that has entered into a reinsurance contract in respect of its linked long-term insurance business must nevertheless discharge its responsibilities under its linked long-term insurance contracts, as if no reinsurance contract had been effected.
COBS 21.2.4BGRP
To comply with the requirements of COBS 21.2.4A R, a firm should:(1) disclose to policyholders the implications of any credit-risk exposure they may face in relation to the solvency of the reinsurer; and(2) suitably monitor the way the reinsurer manages the business in order to discharge its continuing responsibilities to policyholders.
COBS 21.2.8RRP
A firm must notify the FCA1 in writing as soon as it becomes aware of any failure to meet the requirements of COBS 21, or of the PRA Rulebook Solvency II Firms Investments or the PRA Rulebook: Non-Solvency II firm sector2 to the extent applicable to linked long-term contracts of insurance.111
COBS 21.2.9GRP
In considering what action to take in response to written notification of a failure to meet the requirements of this section, the FCA2 will have regard to the extent to which the relevant circumstances are exceptional and temporary and to any other reasons for the failure.
COBS 9.1.1RRP
1This chapter applies to a firmwhich makes a personal recommendation in relation to a designated investment.32
COBS 9.1.2RRP
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.
COBS 9.1.3RRP
This chapter applies to a firm which manages investments.
COBS 9.1.3AGRP
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.
COBS 9.1.5RRP
If the firm makes a personal recommendation to a professional client to take out a life policy, this chapter applies only those rules which implement the requirements of the Insurance Mediation Directive.
COBS 9.1.6GRP
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.
COBS 9.1.7GRP
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.
COBS 9.1.8GRP
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.
COBS 9.1.9GRP
COBS 7 (Insurance mediation) contains requirements relating to the basis on which certain recommendations may be made, including requirements relating to fair analysis and range and scope.
COBS 9.2.1RRP
(1) A firm must take reasonable steps to ensure that a personal recommendation, or a decision to trade, is suitable for its client.(2) When making the personal recommendation or managing his investments, the firm must obtain the necessary information regarding the client's:(a) knowledge and experience in the investment field relevant to the specific type of designated investment or service;(b) financial situation; and(c) investment objectives;so as to enable the firm to make the
COBS 9.2.2RRP
(1) A firm must obtain from the client such information as is necessary for the firm to understand the essential facts about him and have a reasonable basis for believing, giving due consideration to the nature and extent of the service provided, that the specific transaction to be recommended, or entered into in the course of managing:(a) meets his investment objectives;(b) is such that he is able financially to bear any related investment risks consistent with his investment
COBS 9.2.3RRP
The information regarding a client’s knowledge and experience in the investment field includes, to the extent appropriate to the nature of the client, the nature and extent of the service to be provided and the type of product or transaction envisaged, including their complexity and the risks involved, information on:(1) the types of service, transaction and designated investment with which the client is familiar;(2) the nature, volume, frequency of the client’s transactions in
COBS 9.2.4RRP
A firm must not encourage a client not to provide information for the purposes of its assessment of suitability. [Note: article 37(2) of the MiFID implementing Directive]
COBS 9.2.5RRP
A firm is entitled to rely on the information provided by its clients unless it is aware that the information is manifestly out of date, inaccurate or incomplete. [Note: article 37(3) of the MiFID implementing Directive]
COBS 9.2.6RRP
If a firm does not obtain the necessary information to assess suitability, it must not make a personal recommendation to the client or take a decision to trade for him. [Note: article 35(5) of the MiFID implementing Directive]
COBS 9.2.7GRP
Although a firm may not be permitted to make a personal recommendation or take a decision to trade because it does not have the necessary information, its client may still ask the firm to provide another service such as, for example, to arrange a deal or to deal as agent for the client. If this happens, the firm should ensure that it receives written confirmation of the instructions. The firm should also bear in mind the client's best interests rule and any obligation it may have
COBS 9.2.8RRP
(1) If a firm makes a personal recommendation or manages investments for a professional client in the course of MiFID or equivalent third country business, it is entitled to assume that, in relation to the products, transactions and services for which the professional client is so classified, the client has the necessary level of experience and knowledge for the purposes of COBS 9.2.2R (1)(c).(2) If the service consists of making a personal recommendation to a per se professional
COBS 9.2.9RRP
(1) When recommending a small friendly societylife policy, a firm, for the purpose of assessing suitability, need only obtain details of the net income and expenditure of the client and his dependants.(2) A friendly societylife policy is small if the premium:(a) does not exceed £50 a year; or(b) if payable weekly, £1 a week.(3) The firm must keep for five years a record of the reasons why the recommendation is considered suitable.
COBS 20.4.1RRP
A firm must:(1) on request, provide its PPFM, or the PPFM applicable to specified with-profits funds:(a) free of charge to its with-profits policyholders; or(b) for a reasonable charge to any person who is not its with-profits policyholder; and(2) if the firm publishes its PPFM on its website, prominently signpost its location there.
COBS 20.4.2RRP
A firm must send its with-profits policyholders who are affected by any change in its PPFM, written notice, setting out any:(1) proposed changes to the with-profits principles, three months in advance of the effective date; and(2) changes to the with-profits practices, within a reasonable time.
COBS 20.4.3RRP
A firm need not give the notice required if the change to its PPFM:(1) is necessary to correct an error or omission; or(2) would improve clarity or presentation without materially affecting the PPFM's substance; or(3) is immaterial.
COBS 20.4.4RRP
In relation to any with-profits policyholder where the state of the commitment is2 the United Kingdom, an EEA insurer must:2(1) provide the information necessary to enable that policyholder properly to understand the insurer's commitment under the policy;2(2) ensure that the information provided is not narrower in scope or less detailed in content than the information required to be provided in the PPFM produced by a firm subject to COBS 20.3;2 and2(3) send the policyholder who
COBS 20.4.7RRP
A firm must produce an annual report to its with-profits policyholders, which must:(1) state whether, throughout the financial year to which the report relates, the firm believes it has complied with its obligations relating to its PPFM and setting out its reasons for that belief;(2) address all significant relevant issues, including the way in which the firm has:(a) exercised, or failed to exercise, any discretion that it has in the conduct of its with-profits business; and(b)
COBS 20.4.8GRP
The following documents should be annexed to the annual report in this section:(1) the report to with-profits policyholders made by a with-profits actuary in respect of each financial year (see SUP 4.3.16AR(4)); and(2) any statement or report provided by the person or committee who provides the independent judgement under the firm's governance arrangements for its with-profits business.
COBS 20.4.9GRP
In preparing the annual report to with-profits policyholders, a firm should take advice from a with-profits actuary.
COBS 20.4.10GRP
A firm should make the annual report available to with-profits policyholders within six months of the end of the financial year to which it relates. A firm should notify its with-profits policyholders in any annual statements how copies of the report can be obtained.
COBS 18.6.1RRP
1This section applies to a firm when it carries on Lloyd's market activities.
COBS 18.6.2RRP
Only COBS 3 (Client categorisation) and the financial promotion rules apply when a firm is carrying out Lloyd's market activities.
COBS 18.6.3GRP
Firms are reminded that syndicate business plans may be used in ways that bring them within the definition of a financial promotion.
COBS 18.6.4RRP
When a firm is carrying on Lloyd's market activities, any reference in COBS to the term:(1) designated investment is to be taken to include the following specified investments:(a) the underwriting capacity of a Lloyd's syndicate;(b) membership of a Lloyd's syndicate; and (c) rights to or interests in the specified investments in (a) or (b);(2) designated investment business is to be taken to include the following regulated activities:(a) advising on syndicate participation at
COBS 18.6.5GRP
Whilst COBS has limited application to Lloyd's market activities, firms conducting Lloyd's market activities are reminded that they are required to comply with the Principles.
COBS 13.6.1RRP
1A firm that agrees to facilitate3 the payment of an adviser charge or consultancy charge, or an increase in such a charge, from a new or3 in-force packaged product, must prepare sufficient information for the retail client to be able to understand the likely effect of that facilitation, in good time before it takes effect2.2
COBS 18.2.1RRP

The provisions of COBS in the table do not apply in relation to any energy market activity or oil market activity carried on by a firm which is MiFID or equivalent third country business:

COBS

Description

36.1A

Adviser charging and remuneration

36.1B

Retail investment product provider requirements relating to adviser charging and remuneration

36.2A

Describing advice services

4

4

6.4

Disclosure of charges, remuneration and commission

9.4

Suitability reports

9.6

Special rules for providing basic advice on a stakeholder product

11.6

Use of dealing commission

16.3.9

Guidance on contingent liability transaction

16.5

Quotations for surrender values

16.6

Life insurance contracts - communications to clients

16 Annex 1 R (1) 14

Information to be provided in accordance with COBS 16.2.1 R and 16.3
COBS 18.2.2GRP

The provisions of COBS in the table are unlikely to be relevant to any energy market activity or oil market activity carried on by a firm which is MiFID or equivalent third country business:

COBS

Description

5

Distance communications

7

Insurance mediation

13

Preparing product information

14.2

Providing product information to clients

15

Cancellation

17

Claims handling for long-term care insurance

18.1

Trustee firms' regime

18.3

Corporate finance business

18.4

Stock lending activity

19

Pensions - supplementary provisions

20

With-profits
COBS 18.2.7RRP
1The duty to provide best execution does not apply where:(1) the firm has agreed with a professional client that it does not owe a duty of best execution to him; or(2) the firm relies on another person to whom it passes a customer order for execution to provide best execution, but only if it has taken reasonable care to ensure that he will do so.
COBS 18.2.8RRP
1To provide best execution, a firm must:(1) take reasonable care to ascertain the price which is the best available for the customer order in the relevant market at the time for transactions of the kind and size concerned; and (2) execute the customer order at a price which is no less advantageous to the customer, unless the firm has taken reasonable steps to ensure that it would be in the customer's best interests not to do so.
COBS 18.2.9ERP
(1) 1In order to take reasonable care to ascertain the price which is the best available, a firm:(a) should disregard any charges and commission made by it or its agents that are disclosed to the customer under COBS 6.1.9 R (Information about costs and associated charges);(b) need not have access to competing exchanges, or to all, or a minimum number of, available price sources; but if a firm can access prices displayed by different exchanges and trading platforms and make a direct
COBS 13.4.1RRP
1 A key features illustration must include appropriate charges information, information about any interest that will be paid to clients on money held within a personal pension scheme bank account5 and, if it is a non-PRIIP packaged product8 which is not a financial instrument:(1) must include a standardised deterministic projection;(2) the projection and charges information must be consistent with each other so that:66(a) the same intermediate growth rate and assumptions about
COBS 13.4.2RRP
When the rules in this chapter require a key features illustration to be prepared, it must not take the form of a generic key features illustration:33(1) unless 3there are reasonable grounds for believing that it3 will be sufficient to enable a retail client to make an informed decision about whether to invest; or3(2) if it is part of a3direct offer financial promotion which contains a personal recommendation; or33(3) if a personal pension scheme or a stakeholder pension scheme
COBS 13.4.3GRP
A generic key features illustration3is unlikely to be sufficient to enable a retail client to make an informed decision about whether to invest if the premium or investment returns on the product will be materially affected by the personal characteristics of the investor. 3
COBS 13.4.4RRP
There is no requirement under COBS 13.4.1 R5 to include a projection in a key features illustration:(1) for a single premiumlife policy bought as a pure investment product, a product with benefits that do not depend on future investment returns or any other product if it is reasonable to believe that a retail client will not need one to be able to make an informed decision about whether to invest; or(2) if the product is a life policy that will be held in a CTF or sold with basic
COBS 13.4.5GRP
Although there may be no obligation to include a projection in a key features illustration, where a firm chooses to include one, the projection must follow the appropriate requirements, as outlined in this section, or for financial instruments under COBS 4.6.7 R.
COBS 11.4.1RRP
Unless a client expressly instructs otherwise, a firm must, in the case of a clientlimit order in respect of shares admitted to trading on a regulated market which is not immediately executed under prevailing market conditions, take measures to facilitate the earliest possible execution of that order by making public immediately that clientlimit order in a manner which is easily accessible to other market participants. [Note: article 22(2) of MiFID]
COBS 11.4.2GRP
In respect of transactions executed between eligible counterparties, the obligation to disclose clientlimit orders should only apply where the counterparty is explicitly sending a limit order to a firm for its execution. [Note: recital 42 to MiFID]
COBS 11.4.3EURP
An investment firm shall be considered to disclose clientlimit orders that are not immediately executable if it transmits the order to a regulated market or MTF that operates an order book trading system, or ensures that the order is made public and can be easily executed as soon as market conditions allow. [Note: article 31 of MiFID Regulation]
COBS 11.4.4GRP
MAR 5.8.2 EU sets out the conditions required for an arrangement to make clientlimit orders1 public under this section. MAR 5.8.3 G and MAR 5.8.4 G provide guidance on these conditions.1
COBS 11.4.5RRP
The obligation to make public a limit order will not apply to a limit order that is large in scale compared with normal market size. [Note: article 22(2) of MiFID]
COBS 11.4.6GRP
MAR 5.7.10 EU and MAR 5.7.11 EU set out when an order shall be considered large in scale compared with normal market size.
COBS 22.2.1RRP
(1) 1The requirements in this section apply to a firm when dealing in or arranging a deal in a mutual society share with or for a retail client in the EEA where the retail client is to enter into the deal as buyer.(2) The requirements in this section do not apply if:(a) the firm has taken reasonable steps to ensure that one (or more) of the exemptions in COBS 22.2.4R applies; or(b) the deal relates to the trading of a mutual society share in the secondary market.(3) In this section,
COBS 22.2.2RRP
1The firm must give the retail client the following risk warning on paper or another durable medium and obtain confirmation in writing from the retail client that he has read it, in good time before the retail client has committed to buy the mutual society share:“The investment to which this communication relates is a share. Direct investment in shares can be high risk and is very different to investment in deposit accounts or other savings products. In particular, you should
COBS 22.2.3RRP
(1) 1The requirements in (2) and (3) must be met if:(a) the firm is not providing an investment service in the course of MiFID or equivalent third country business; and(b) the retail client is not otherwise receiving advice on the mutual society share from the firm or another person.(2) The firm must give the retail client the following statement on paper or another durable medium and obtain confirmation in writing from the retail client that he or she2 has signed it, in good
COBS 22.2.4RRP

  1. 1Each of the exemptions listed below applies only if the retail client is of the type described for the exemption and provided any additional conditions for the exemption are met.

    2. Title

    Type of retail client

    Additional conditions

    Certified high net worth investor

    (a) An individual who meets the requirements set out in

    COBS 4.12.6R; or

    (b) an individual in an EEA State other than the UK who meets requirements which are broadly equivalent to those set out in COBS 4.12.6R; or

    (c) a person (or persons) legally empowered to make investment decisions on behalf of an individual who meets the earnings or net asset requirements in (a) or (b) above.

    The firm must consider that the mutual society share is likely to be suitable for that individual, based on a preliminary assessment of that individual’s profile and objectives (see COBS 4.12.5G(2)).

    Certified sophisticated investor

    (a) An individual who meets the requirements set out in

    COBS 4.12.7R; or

    (b) an individual in an EEA State other than the UK who meets requirements which are broadly equivalent to those set out in COBS 4.12.7R; or

    (c) an individual who meets the requirements for either (a) or (b) above and who is legally empowered (solely or jointly with others) to make investment decisions on behalf of another person who is the firm's client.

    Not applicable.

    Self-certified sophisticated investor

    (a) An individual who meets the requirements set out in

    COBS 4.12.8R; or

    (b) an individual in an EEA State other than the UK who meets requirements which are broadly equivalent to those set out in COBS 4.12.8R; or

    (c) an individual who meets the requirements for either (a) or (b) above and who is legally empowered (solely or jointly with others) to make investment decisions on behalf of another person who is the firm's client.

    Not applicable.
COBS 22.2.5RRP
(1) 1For the purposes of any assessments or certifications required by the exemptions in COBS 22.2.4R, any references in COBS 4.12 provisions to non-mainstream pooled investments must be read as though they are references to mutual society shares.(2) If the firm is relying on the exemptions for certified high net worth investors, certified sophisticated investors or self-certified sophisticated investors to comply with this section, the statement the investor must sign should
COBS 22.2.6RRP
1A firm which carries on an activity which is subject to this section must comply with the following record-keeping requirements:(1) the person allocated the compliance oversight function in the firm must make a record at or near the time of the activity certifying it complies with the requirements set out in this section;(2) the making of the record required in (1) may be delegated to one or more employees of the firm who report to and are supervised by the person allocated the
COBS 22.2.7GRP
1In this section:(1) any requirement that a document is signed may be satisfied by an electronic signature or electronic evidence of assent; and(2) any references to writing should be construed in accordance with GEN 2.2.14R and its related guidance provisions.
COBS 15.4.1RRP
By exercising a right to cancel, the consumer withdraws from the contract and the contract is terminated.
COBS 15.4.2RRP
(1) This rule applies in relation to a distance contract that is not a life policy, personal pension scheme, cash deposit ISA, cash-only lifetime ISA3 or CTF.(2) When the consumer exercises their3 right to cancel they3 may be required to pay, without any undue delay, for the service actually provided by the firm in accordance with the contract. The performance of the contract may only begin after the consumer has given their3 approval. The amount payable must not:(a) exceed an
COBS 15.4.3RRP
(1) The firm may require the consumer to pay for any loss under a contract caused by market movements that the firm would reasonably incur in cancelling it. The period for calculating the loss shall end on the day on which the firm receives the notification of cancellation.(2) This rule:(a) does not apply for a distance contract or for a contract established on a regular or recurring premium or payment basis; and(b) only applies if the firm has complied with its obligations to
COBS 15.4.4RRP
The firm must, without any undue delay and no later than within 30 calendar days, return to the consumer any sums it has received from him in accordance with the contract2, except for any amount that the consumer may be required to pay under this section. This period shall begin from the day on which the firm receives the notification of cancellation.2 [Note: article 7(4) of the Distance Marketing Directive]
COBS 15.4.5RRP
The firm is entitled to receive from the consumer any sums and/or property he has received from the firm without any undue delay and no later than within 30 calendar days. This period shall begin from the day on which the consumer dispatches the notification of cancellation. [Note: article 7(5) of the Distance Marketing Directive]
COBS 15.4.6RRP
Any sums payable under this section on cancellation of a contract are owed as simple contract debts and may be set off against each other.
COBS 8.1.1RRP
(1) 1This chapter applies to a firm in relation to designated investment business carried on for:(a) a retail client; and(b) in relation to MiFID or equivalent third country business, a professional client.(2) If expressly provided, this chapter also applies to a firm in relation to other ancillary services carried on for a client, but only in relation to its MiFID or equivalent third country business.(3) But this chapter does not apply to a firm to the extent that it is effecting
COBS 8.1.2RRP
If a firm carries on designated investment business, other than advising on investments or advising on conversion or transfer of pension benefits, 2with or for a new retail client, the firm must enter into a written basic agreement, on paper or other durable medium, with the client setting out the essential rights and obligations of the firm and the client.[Note: article 39 of the MiFID implementing Directive]
COBS 8.1.3RRP
(1) A firm must, in good time before a retail client is bound by any agreement relating to designated investment business or ancillary services or before the provision of those services, whichever is the earlier, provide that client with:(a) the terms of any such agreement; and(b) the information about the firm and its services relating to that agreement or to those services required by COBS 6.1.4 R, including information on communications, conflicts of interest and authorised
COBS 8.1.4RRP
(1) A firm must establish a record that includes the document or documents agreed between it and a client which set out the rights and obligations of the parties, and the other terms on which it will provide services to the client.(2) The record must be maintained for at least whichever is the longer of:(a) 5 years; or(b) the duration of the relationship with the client; or(c) in the case of a record relating to a pension transfer, pension conversion, 2pension opt-out or FSAVC, indefinitely.
COBS 8.1.5RRP
For the purposes of this chapter, a firm may incorporate the rights and duties of the parties into an agreement by referring to other documents or legal texts. [Note: article 19(7) of MiFID and article 39 of the MiFID implementing Directive]
COBS 8.1.6GRP
When considering its approach to client agreements, a firm should be aware of other obligations in the Handbook which may be relevant. These include the fair, clear and not misleading rule and the rules on disclosure of information to a client before providing services and the rules on distance communications (principally in COBS 2.2, 5, 6 and 13).
COBS 4.2.1RRP
(1) A firm must ensure that a communication or a financial promotion is fair, clear and not misleading.(2) This rule applies in relation to:(a) a communication by the firm to a client in relation to designated investment business other than a third party prospectus;(b) a financial promotioncommunicated by the firm that is not:(i) an excluded communication;(ii) a non-retail communication;(iii) a third party prospectus; and(c) a financial promotion approved by the firm.[Note: article
COBS 4.2.2GRP
(1) 1The fair, clear and not misleading rule applies in a way that is appropriate and proportionate taking into account the means of communication and the information the communication is intended to convey. So a communication addressed to a professional client may not need to include the same information, or be presented in the same way, as a communication addressed to a retail client.(2) COBS 4.2.1R(2)(b)1 does not limit the application of the fair, clear and not misleading
COBS 4.2.3GRP
Part 7 (Offences relating to Financial Services) of the Financial Services Act 2012 creates criminal offences relating to certain misleading statements and practices.
COBS 4.2.4GRP
A firm should ensure that a financial promotion:(1) for a product or service that places a client's capital at risk makes this clear;(2) that quotes a yield figure gives a balanced impression of both the short and long term prospects for the investment;(3) that promotes an investment or service whose charging structure is complex, or in relation to which the firm will receive more than one element of remuneration, includes the information necessary to ensure that it is fair, clear
COBS 4.2.5GRP
2A communication or a financial promotion should not describe a feature of a product or service as “guaranteed”, “protected” or “secure”, or use a similar term unless:24(1) that term is capable of being a fair, clear and not misleading description of it; and(2) the firm communicates all of the information necessary, and presents that information with sufficient clarity and prominence, to make the use of that term fair, clear and not misleading.45
COBS 4.2.6RRP
1If, in relation to a particular communication or financial promotion, a firm takes reasonable steps to ensure it complies with the fair, clear and not misleading rule, a contravention of that rule does not give rise to a right of action under section 138D of the Act.
COBS 16.2.1RRP
(1) If a firm has carried out an order in the course of its designated investment business on behalf of a client, it must:(a) promptly provide the client, in a durable medium, with the essential information concerning the execution of the order;(b) in the case of a retail client, send the client a notice in a durable medium confirming the execution of the order and such of the trade confirmation information (COBS 16 Annex 1R) 2as is applicable: (i) as soon as possible and no later
COBS 16.2.2GRP
The requirement concerning orders relating to bonds funding a mortgage loan agreement is unlikely to be relevant to products in the United Kingdom market.
COBS 16.2.3RRP
For the purposes of calculating the unit price in the trade confirmation information, where the order is executed in tranches, the firm may supply the client with information about the price of each tranche or the average price. If the average price is provided, the firm must supply the retail client with information about the price of each tranche upon request. [Note: article 40(4) of the MiFID implementing Directive]
COBS 16.2.3AGRP
1In determining what is essential information, a firm should consider including:(1) for transactions in a derivative:(a) the maturity, delivery or expiry date of the derivative;(b) in the case of an option, a reference to the last exercise date, whether it can be exercised before maturity and the strike price;(c) if the transaction closes out an open futures position, all essential details required in respect of each contract comprised in the open position and each contract by
COBS 16.2.4GRP
Where a firm executes an order in tranches, the firm may, where appropriate, indicate the trading time and the execution venue in a way that is consistent with this, such as, "multiple". In accordance with the client's best interests rule, a firm should provide additional information at the client's request.
COBS 16.2.5GRP
In accordance with COBS 2.4.9 R, a firm may dispatch a confirmation to an agent, other than the firm or an associate of the firm, nominated by the client in writing.
COBS 16.2.7RRP
A firm must retain a copy of any confirmation despatched to a client under this section:(1) for MiFID or equivalent third country business, for a period of at least five years; or(2) for business that is not MiFID or equivalent third country business, for a period of at least three years;from the date of despatch. [Note: see article 51(3) of the MiFID implementing Directive]
COBS 18.1.1RRP
(1) 1This section applies to the MiFID or equivalent third country business carried on by a trustee firm.(2) It does not apply to a trustee firm when acting as:(a) a depositary; or(b)R the trustee of a personal pension scheme or stakeholder pension scheme.
COBS 18.1.2RRP

The provisions of COBS in the table do not apply to a trustee firm to which this section applies:

COBS

Description

26.1A

Adviser charging and remuneration

26.1B

Retail investment product provider requirements relating to adviser charging and remuneration

26.2A

Describing advice services

3

3

6.4

Disclosure of charges, remuneration and commission

9.4

Suitability reports

9.6

Special rules for providing basic advice on a stakeholder product

16.3.9

Guidance on contingent liability transaction

16.5

Quotations for surrender values

16.6

Life insurance contracts - communications to clients

16 Annex 1 R (1) 14

Information to be provided in accordance with COBS 16.2.1 R and 16.3
COBS 18.1.3GRP

The provisions of COBS in the table are unlikely to be relevant in relation to a trustee firm to which this section applies:

COBS

Description

5

Distance communications

13

Preparing product information

14.2

Providing product information

15

Cancellation

17

Claims handling for long-term care insurance

18.2

Energy market activity and oil market activity

18.3

Corporate finance business

18.4

Stock lending activity

19

Pensions - supplementary provisions

20

With-profits
COBS 18.1.4GRP
To the extent a rule in COBS applies to a trustee firm, that rule:(1) applies in addition to any duties or powers imposed or conferred upon a trustee by the general law; and(2) does not qualify or restrict the duties or powers that the general law imposes or confers upon a trustee; trustee firms will be under a duty to observe the provisions of their trust instrument; if its provisions conflict with any applicable rule, trustee firms will need to take advice in resolving the
COBS 18.1.5GRP
In considering and reaching decisions as to how applicable rules in COBS apply in the context of a particular trust arrangement, a trustee firm should consider the nature of that arrangement and the provisions of the relevant trust instrument.
COBS 18.1.6GRP
Where an applicable rule in COBS requires the doing of any thing in relation to a client, the trustee firm should consider who, in the context of that rule and having regard to the particular trust arrangement, is the most appropriate person to treat as its client. This might, for example, be the beneficiary, another trustee or the trust, depending on the particular circumstances.