Related provisions for COBS 11.6.1
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(1) Subject to (3), an3investment manager must not accept any good or service3in addition to the execution of its customer orders if it:33(a) executes its customer orders through a broker or another person;(b) passes on the broker's or other person'scharges to its customers; and(c) is offered that good or service3 in return for the charges referred to in (b).3(2) [deleted]3(3) 3The prohibition under (1) does not apply where:(a) the investment manager has reasonable grounds to
(1) Under COBS 11.6.3R (3)(c)(i), for a good or service to be directly related to the execution of trades on behalf of the investment manager'scustomers it must be:33(a) linked to the arranging and conclusion of a specific investment transaction (or series of related transactions); and (b) provided between the point at which the investment manager makes an investment or trading decision and the point at which the investment transaction (or series of related transactions) is concluded.
(1) Under COBS 11.6.3R (3)(c)(ii), for a good or service to amount to the provision of substantive research the relevant research must:33(a) be3 capable of adding value to the investment or trading decisions by providing new insights that inform the investment manager when making such decisions about its customers' portfolios;3(b) whatever form its output takes, represent3 original thought, in the critical and careful consideration and assessment of new and existing facts, and
Examples of goods or services that relate to the provision of research that the FCA does not regard as meeting the requirements of the rule on use of dealing commission (COBS 11.6.3 R) include price feeds or historical price data that have not been analysed or manipulated in order to present the investment manager with meaningful conclusions. These would not meet the evidential criteria for a good or service to amount to the provision of substantive research under COBS 11.6.5E
An investment manager that enters into arrangements under this section must make adequate prior disclosure to customers concerning the receipt of goods or services that directly relate to the execution of trades or amount to the provision of substantive research3. This prior disclosure should form part of the summary form disclosure under the rule on inducements (COBS 2.3.1 R).3