Related provisions for COBS 2.3.-1B
41 - 60 of 117 items.
The EEA territorial scope rule modifies the default territorial scope of the section on personal account dealing (see COBS 11.7 and COBS 11.7A6) to the extent necessary to be compatible with European law (see paragraph 1.1G5 of Part 3 of COBS 1 Annex 1). This means that the section on personal account dealing also applies to passported activities carried on by a UK MiFID investment firm or a UK UCITS management company5 from a branch in another EEA state, but does not apply to
3The section on best execution (COBS 11.2A6) does not apply to a firm when:(1) executing orders: or(2) placing orders with other entities for execution: or(3) transmitting orders to other entities for execution;in relation to a spread-bet which is not a financial instrument, where the firm has not made a personal recommendation in relation to that spread-bet.
Each of the following is a per se professional client unless and to the extent it is an eligible counterparty or is given a different categorisation under this chapter:(1) an entity required to be authorised or regulated to operate in the financial markets. The following list includes all authorised entities carrying out the characteristic activities of the entities mentioned, whether authorised by an EEA State or a third country and whether or not authorised by reference to a
A firm may treat a client other than a local public authority or municipality3 as an elective professional client if it complies with (1) and (3) and, where applicable, (2):(1) the firm undertakes an adequate assessment of the expertise, experience and knowledge of the client that gives reasonable assurance, in light of the nature of the transactions or services envisaged, that the client is capable of making his own investment decisions and understanding the risks involved (the
Before deciding to accept a request for re-categorisation as an elective professional client a firm must take all reasonable steps to ensure that the client requesting to be treated as an elective professional client satisfies the qualitative test and, where applicable, the relevant3 quantitative test. [Note: second paragraph of section II.2 of annex II to MiFID]
(1) If a firm becomes aware that a client no longer fulfils the initial conditions that made it eligible for categorisation as an elective professional client, the firm must take the appropriate action.(2) Where the appropriate action involves re-categorising that client as a retail client, the firm must notify that client of its new categorisation. [Note: fourth paragraph of section II.2 of annex II to MiFID3]
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.
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.
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
A key features document must:(1) include enough information about the nature and complexity of the product, how it works, any limitations or minimum standards that apply and the material benefits and risks of buying or investing for a retail client to be able to make an informed decision about whether to proceed; 7(2) explain:(a) the arrangements for handling complaints about the product;(b) that compensation might be available from the FSCS if the firm cannot meet its liabilities
TableA key features document for a non-PRIIP packaged product8 must:(1)Include the title: ‘key features of the [name of product]’;(2)describe the product in the order of the following headings, and by giving the following information under those headings:HeadingInformation to be given‘Its aims’A brief description of the product’s aims‘Your commitment’ or ‘Your investment’What a retail client is committing to or investing in and any consequences of failing to maintain the commitment
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.
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.
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
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)
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.
(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
(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) 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) Where the middle column in the table in (5) refers to promotion to a category of person, this means
(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 or 9A (as applicable)10. Firms should also be mindful of the appropriateness requirements in COBS 10 and 10A10 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
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
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
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
(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
(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
(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
(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
(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
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
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
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: COBSDescription36.1AAdviser charging and remuneration36.1BRetail investment product provider requirements relating to adviser charging and remunerationCOBS 6.2B53Describing advice services446.4Disclosure of charges, remuneration and commission9.4Suitability reports9.6Special rules for providing
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:COBSDescription5Distance communications7Insurance distribution613Preparing product information14.2Providing product information to clients15Cancellation17Claims handling for long-term care insurance18.1Trustee firms' regime18.3Corporate finance business18.4Stock lending activity19Pensions -
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.
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.
(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
(1) 4Subject to (2) and (3), this section applies to a firm in relation to the communication or approval of a financial promotion that relates to the business of an overseas person.4(2) This section does not apply to a firm in relation to its MiFID or equivalent third country business.(3) 4If a communication relates to a firm's business that is not MiFID or equivalent third country business, this section does not apply:4(a) to the extent that it is an excluded communication;(b)
A firm must not communicate or approve a financial promotion which relates to a particular relevant investment or relevant business of an overseas person, unless:(1) the financial promotion makes clear which firm has approved or communicated it and, where relevant, explains:(a) that the rules made under the Act for the protection of retail clients do not apply;(b) the extent and level to which the compensation scheme will be available, or if the scheme will not be available, a
A firm may only2communicate or approve a financial promotion to enter into a life policy with a person who is:22(1) an authorised person; or(2) an exempt person who is exempt in relation to effecting or carrying out contracts of insurance of the class to which the financial promotion relates; or(3) an overseas long-term insurer that is entitled under the law of its home country or territory to carry on there insurance business of the class to which the financial promotion rel
A financial promotion for an overseas long-term insurer, which has no establishment in the United Kingdom, must include:(1) the full name of the overseas long-term insurer, the country where it is registered, and, if different, the country where its head office is situated;(2) a prominent statement that 'holders of policies issued by the company will not be protected by the Financial Services Compensation Scheme if the company becomes unable to meet its liabilities to them'; and(3)
A financial promotion for an overseas long-term insurer which is authorised to carry on long-term insurance business in any country or territory listed in paragraph (c) of the Glossary definition of overseas long-term insurer must also include:(1) the full name of any trustee of property of any description which is retained by the overseas long-term insurer in respect of the promoted contracts;(2) an indication whether the investment of such property (or any part of it) is managed
If a financial promotion relates to a life policy with an overseas long-term insurer but does not name the overseas long-term insurer by giving its full name or its business name:(1) it must include the following prominent statement: "This financial promotion relates to an insurance company which does not, and is not authorised to, carry on in any part of the United Kingdom the class of insurance business to which this promotion relates. This means that the management and solvency
(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,
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
(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 a personal recommendation4 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
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.TitleType of retail clientAdditional conditionsCertified 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
(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
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
(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
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.6
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
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.
(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 30(1)5 of MiFID]
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
A firm may treat a client as an elective eligible counterparty in relation to business other than MiFID or equivalent third country business5 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)) and5: 1(i) is a body corporate (including a limited liability partnership) which has (or any of whose holding companies or subsidiaries
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 30(3)5 of MiFID]
(1) A firm that holds clientdesignated investments or client money for a client must send that client at least once a year a statement in a durable medium of those designated investments or that client money unless:4(a) 4such a statement has been provided in a periodic statement; or(b) 4the firm: (i) 4provides the client with access to an online system, which qualifies as a durable medium, where up-to-date statements of a client’sdesignated investments or client money can be easily
A firm must include the following information4 in a statement of client assets referred to under this section4: (1) details of all the designated investments or client money held by the firm for the client at the end of the period covered by the statement;(2) the extent to which any clientdesignated investments or client money have been the subject of securities financing transactions; and(3) the extent of any benefit that has accrued to the client by virtue of participation in
In cases where the portfolio of a client includes the proceeds of one or more unsettled transactions, the information in a statement provided under this section may be based either on the trade date or the settlement date, provided that the same basis is applied consistently to all such information in the statement.4
1In reporting to a client in accordance with this section, a firm should consider whether to provide details of any assets loaned or charged including:(1) which investments (if any) were at the end of the relevant period loaned to any third party and which investments (if any) were at that date charged to secure borrowings made on behalf of the portfolio; and(2) the aggregate of any interest payments made and income received during the period in respect of loans or borrowings
The provisions of COBS in the table do not apply to a trustee firm to which this section applies:COBSDescription26.1AAdviser charging and remuneration26.1BRetail investment product provider requirements relating to adviser charging and remuneration424336.4Disclosure of charges, remuneration and commission449.6Special rules for providing basic advice on a stakeholder product16A.4.54Guidance on contingent liability transactions444444
The provisions of COBS in the table are unlikely to be relevant in relation to a trustee firm to which this section applies:COBSDescription5Distance communications13Preparing product information14.2Providing product information 15Cancellation17Claims handling for long-term care insurance18.2Energy market activity and oil market activity18.3Corporate finance business18.4Stock lending activity19Pensions - supplementary provisions20With-profits
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
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.
(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
(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
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]
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]
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 or traded on a trading venue2 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 28(2)2 of Mi
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
For the purposes of this section, the relevant provisions are:(1) the rules article 37(2)(a) and (b) of the MiFID Org Regulation4 on personal transactions undertaken by financial analysts copied out in COBS 12.2.21EU which apply as rules as a result of COBS 12.2.15R4; (2) article 67(3) of the MiFID Org Regulation4 on the misuse of information relating to pending client orders copied out in COBS 11.3.5AEU which applies as a rule as a result of COBS 11.3.1AR4.
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.
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
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
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
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