A pre-N2 company does not have to comply with any of the provisions marked ETP6 in the COB TR 2 table until the end of the transition period. A pre-N2 entity will not be in breach of any of the provisions identified as TTP1 in the COB TR 2 table to the extent that it can demonstrate that it has made the periodic disclosures required by COB 2.2.18R (Periodic Disclosure of Hours) at or after commencement. , according to the period in which the start falls, according to the relevant rule of the previous regulator. A pre-N2 company will not be in breach of any of the provisions identified as TTP2 in the COB TR 2 table to the extent that it can demonstrate that, at or after commencement, it has produced and made available the profit sharing guide required by COB 6.9.4R for the financial year in which it begins, in accordance with the relevant.
A pre-N2 firm will not breach any of the provisions marked TTP3 in Table COB TR 2 to the extent that it is able to demonstrate that, on or after inception, it provided its clients with a periodic statement which is required by COB 8.2. .4R (Requirement for a periodic statement) for the period in which entry into force falls, in accordance with the corresponding rules of its previous regulator. A pre-N2 firm will not breach any of the provisions marked TSP1 in Table COB TR 2 to the extent that it is able to demonstrate that, on or after commencement, it has carried out the confirmation exercise referred to in COB 3.6, did not perform. 1R (Confirmation of compliance), for an investment advertisement issued or approved before commencement, in accordance with the corresponding rule of its previous regulator.
R(2) (Large inter- mediate customer
A former RPB firm will not contravene any of the provisions marked ETP1 in table COB TR to the extent that, at or after commencement, it is able to demonstrate that it has complied with the corresponding rule of its former supervisory authority, or where applicable , the relevant prior statutory requirement, subject to any modification, where applicable, to take account of the enactment of the Act. A former RPB firm will not contravene any of the provisions marked TTP1 in Table COB TR 4 to the extent that, at or after commencement, it is able to demonstrate that it has provided its clients with a periodic statement required by COB 8.2. 4 R for the period in which the commencement falls, in accordance with the corresponding rules of its previous supervisory authority. An ex-RPB firm will not contravene any of the provisions marked TSP1 in table COB TR 4 to the extent that it is able to demonstrate that at or after commencement it has carried out the verification exercise referred to in COB 3.6 . 2 R (2), for an investment advertisement issued or approved before commencement in accordance with the corresponding rule of its previous supervisory authority.
The RPB firm will not challenge any of the provisions in Table COB TR 4 labeled TSP2 to the extent that, at or after commencement, it is able to demonstrate that it has continued to use or rely on business conditions. (including a customer agreement) given to or made with a customer in accordance with the relevant rule of its previous regulator. An ex-RPB firm will not contravene any of the provisions labeled TSP4 in Table COB TR2 to the extent that, at or after commencement, it uses, or relies on, an eligibility letter or, as the case may be, a risk warning or disclosure , given to a client in accordance with the relevant rule of its previous regulator, in relation to a transaction or series of transactions executed or arranged before the commencement.
ACCEPTING CUSTOMERS
Customers’ understanding of risk
REPORTING TO CUSTOMERS 8.1 Confirmation of transactions
Periodic statements
CLIENT ASSETS
Application and general provisions
Clear, fair and not misleading communication 2.2 Inducements and soft commission
Reliance on others 2.4 Chinese walls
Exclusion of liability 4.1 Client classification
Terms of business and client agreements with customers 5.3 Suitability
Customers’ understanding of risk 5.5 Information about the firm
Disclosure of charges, remuneration and commission 7.1 Conflict of interest and material interest
Aggregation and allocation
Realisation of a private customer’s assets 7.9 Lending to private customers
Customer order and execution records 7.13 Personal account dealing
Confirmation of transactions Chapter 9 Client assets
Exclusion of liability Chapter 3 Financial promotion
Customers’ understanding of risk 7.1 Conflict of interest and material interest
Client assets
Clear, fair and not misleading communication 2.3 Reliance on others
Chinese walls
Exclusion of liability
Financial promotion 4.1 Client classification
Conflict of interest and material interest 7.3 Dealing ahead
7 A supplier firm may provide an independent intermediary with any of the following:. a) quotations and estimates in relation to its packaged products and, in relation to specific investment transactions (or for the purpose of any scheme for review of past business), advice on the completion of forms or other documents;. This attachment belongs to COB 3.2.7G(2) and summarizes some of the key exemptions in the Financial Promotion Order. References to articles are to articles of the Financial Promotion Order and to paragraphs are to paragraphs of schedule 1 of the Financial Promotion Order.
A financial promotion for a PEP or ISA transfer should include details of the likely advantages and disadvantages of transferring an existing PEP or ISA holding company, including:. A company making a financial promotion for corporate bond funds or similar contracts should consider the following:. Performance figures should reflect the fund's overall position, taking into account any cash held.
Where applicable, it should be disclosed that both the yield and the fund's capital value may fluctuate. Using the average level of the index will reduce the investment potential of the contract. Much of the financial advantage in phased retirement is derived from the use of tax-free cash sums to provide a portion of the investor's pension payment.
Therefore the investor does not have the benefit of a tax-free amount of money in retirement, which can be a disadvantage. Firms must provide a statement showing that the high income is achieved at the expense of most of the potential capital gain. The word "guarantee" is commonly used to describe the minimum amount payable at the end of the term.
Some promotions claim returns that exceed the percentage increase in the FTSE 100 index, without mentioning that 100% of capital is not invested at the start. Companies promoting personal pension schemes through direct offer financial promotions are reminded of the provisions of COB 5.3.
2 Where the left column in the table refers to promotion to a category of persons, this means that the invitation or inducement:. 3 An enterprise may invoke more than one exemption in relation to the same invitation or inducement.
- Any collective investment scheme pro- vided that the participation of eligible
Any collective investment scheme, provided that the participation of eligible employees evidences 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) and/or (ii) with one or more customers of such company.
Any service provided to the trustee or custodian of the fund that is not part of the operator's management activity. Complete a transaction in the shares of an investment trust that is the subject of the settlement. When a material interest or conflict of interest may or will arise, how the Company will ensure fair treatment of the customer, as required by COB 7.1.3R (Fair Treatment).
If the firm acts as an intermediary fund adviser for a private client, a statement explaining the nature of the firm's dual role as adviser to the client and adviser to the life office or operator concerned. Where a firm chooses to meet any of its obligations under COB 5.4.3R (Requirement for risk warnings) in terms of business in relation to any of the following:. d) securities that can be subject to stabilization; In the case of a private client, that the firm may undertake stock lending activity with or for the private client (if so), specifying the assets to be lent, the type and value of the relevant collateral from the borrower and the manner and amount of payment that belongs to the private customer in relation to lending. 20) The right to realize the assets of a private client.
If applicable, an explanation of the compensation arrangements available to customers under the Compensation Scheme if the firm is unable to meet any of its obligations, or the availability of an explanation outlining those arrangements. Firms promoting a personal pension scheme (including a group personal pension scheme) to employees of a particular employer through direct offer financial promotions are reminded of the provisions of COB 5.3.28R. Accordingly, firms should take reasonable care to ensure that the personal pension scheme is likely to be at least as suitable as a stakeholder pension scheme for the majority of employees to whom the personal pension scheme is being promoted, and that this is adequately evidenced. In particular, the following information (which is not exhaustive) should be considered and provided to the customer, usually as part of the suitability letter, before the transfer takes place:. a) exit fees and any other costs related to the transfer;.
This is usually called a "letter of suitability", although it does not have to be in letter form, for example it could be part of:. a) financial report to the client (provided it is visible); or (b) a findings of fact document (a copy of the full findings of fact or recommendations only. Ideally, each suitability letter will be different, reflecting the consultant's approach, client profile, topics discussed and concerns that When using a standardized approach, the company must consider the following: a) it is best to limit standard paragraphs to a description of the most common needs and products that will satisfy these needs;.
Any written communication, including stationery, business cards or other business documentation published by the firm or used by its employees, agents, representatives, financial advisors or introducers, should include:. a) name, business address and telephone number of the company or of the branch or office from which the message originates. In the case of a provider company, when the company's representative first meets a private customer, the customer must have the following information in writing, which can be in the form of a business card, either before he goes beyond the social. initial or as soon as practicable after a telephone conversation is completed:. a) the name, address and telephone number of the representative.
