This chapter applies to a limited extent in relation to the communication or approval of a financial promotion relating to a deposit if the deposit is a structured deposit, cash deposit ISA or cash deposit CTF. Approving a financial promotion without communicating it (which includes communicating it) is not MiFID, equivalent third country or optional exempt business.
Communicating with retail clients (non-MiFID provisions)
Application
General rule
■COBS 4.5.2AR) should be given sufficient prominence to enable the retail customer to easily identify the firm responsible for the compliance of the financial promotion with applicable rules. In deciding whether and how to communicate information to a particular target audience, a firm must consider the nature of the product or business, the risks involved, customer engagement, potential.
Comparative information
When deciding whether to include or omit a fact from a communication, the company should follow the guidance in ■COBS 4.2.2G to provide information that is relevant and proportionate.
Referring to tax
Consistent financial promotions
Innovative finance ISA
This warning should be in addition to any more general warnings that the product or service puts the customer's capital at risk (■COBS 4.2.4G(1)). Operators of electronic lending systems and companies advising on P2P contracts should also follow the guidelines in
Lifetime ISA
Authorised fund managers’ communications in relation to benchmarks
As a result of■COBS 4.5.11AR,■COBS 4.5.12Rto■COBS 4.5.15R will not normally be expected to apply to administrative communications if those communications do not refer in any way to the objectives of an authorized fund or the describe benefits or risks of investing in it. communications may include contract notes merely detailing the unitholder's purchase or redemption of units, statements of income distributions or accumulations, and confirmations of a change of unitholder registration details. Subject to ■COBS 4.5.13R, an authorized fund manager must include in any communication about an authorized fund to which this rule applies:.
Funds investing in inherently illiquid assets (FIIAs)
A Communicating with clients
General requirements
When communicating information, a company should consider whether the omission of any material fact will result in the information being insufficient, unclear, unfair or misleading. If the information compares investment or ancillary services, financial instruments or persons providing investment or ancillary services, investment firms shall ensure that the following conditions are met: a) the comparison is meaningful and presented in a fair and balanced manner;.
Past performance
44(7) When the information refers to a specific tax treatment, it must be clearly stated that the tax treatment depends on the individual circumstances of the individual customer and may change in the future. 46(5) Investment firms shall ensure that the information in the marketing message is consistent with all information provided by the firm to clients during the performance of investment and ancillary services.
Simulated past performance
Future performance
A company should not provide information about future performance if it cannot obtain the objective data necessary to meet the requirements.
Information that uses the name of any competent authority
Past, simulated past and future performance (non-MiFID provisions)
A firm shall ensure that information containing an indicator of past performance of the relevant business, a relevant investment or a financial index meets the following conditions: A firm shall ensure that information containing an indicator of simulated past performance of the relevant business, a relevant investment or a financial index, meet the following conditions:
Direct offer financial promotions
Direct offer financial promotions relating to MiFID, equivalent third country or optional exemption business
Effect of provisions marked “UK” for third country investment firms and MiFID optional exemptions firms
Other direct offer financial promotions
Direct offer financial promotions in relation to MiFID, third country equivalent or optional exempt business. document or documents which, alone or in combination, contain that information. This rule does not apply in relation to a MiFID-related marketing communication of a firm, an equivalent third country or optional exempt business.
Guidance
Warrants and derivatives
Cold calls and other promotions that are not in writing
This section applies to a firm in relation to the communication of a financial promotion which is not in writing, but it does not apply:.
Restriction on cold calling
Promotions that are not in writing
Financial promotions with an overseas element
This section does not apply to a firm in relation to its MiFID or equivalent third country business. Approving a financial campaign for communications from an unauthorized person is not MiFID or equivalent third country business.
Financial promotions for the business of an overseas person
Financial promotions for an overseas long-term insurer
Approving and confirming
Systems and controls
Approving financial promotions
This would ensure that an unauthorized person, who then communicates the financial promotion to another person, will not violate the limitation of financial promotion in the law (Article 21). If the approval is limited and an unauthorized person communicates a financial promotion to persons not covered by the approval, the
Communicating financial promotions
If the company approves a financial promotion in circumstances where one or more rules on financial promotion or the prohibition on the approval of a promotion for collective investment schemes in Article 240(1) of the Act (Restriction on Approval) do not expressly apply, the approval must be given on the conditions that limited to these circumstances. For example, if a company approves a financial promotion for communications with a professional client or an eligible counterparty, the approval must be limited to communications with those persons.
Competence and expertise
A company must not confirm the compliance of a financial promotion for the purpose of ■COBS 4.10.9AR(3)(a) unless:. a) is convinced that the financial promotion is in accordance with the rules of financial promotion; and. A company may not confirm the compliance of a financial promotion during a personal visit, telephone conversation or other interactive dialogue.
Relying on another firm's confirmation of compliance
Conflicts of interest
Record keeping: financial promotion
General
A company should consider keeping a record of why it is satisfied that the financial promotion complies with the financial promotion rules. If the financial advertisement includes market information that is regularly updated in accordance with the relevant market, the record keeping rules do not require a company to record this information.
Promotions of restricted mass market investments and non- mass market investments
This rule applies to a company that communicates or may communicate a direct offer of financial promotion in connection with a limited investment in the mass market to which ■COBS 4.12A.15 applies. A firm that authorizes the financial promotion of a direct offering in connection with a limited investment in the mass market to which ■COBS 4.12A.15 applies must take reasonable steps to ensure that:.
44.12[deleted]
A Promotion of restricted mass market investments
Purpose
The requirements in this section regarding the provision of risk warnings are in addition to, and subject to, companies' other obligations in connection with the provision of information.
Restrictions on monetary and non-monetary incentives
Risk warning
The company should drop the words "and you probably won't be protected if something goes wrong" from the risk warning required by (1) if. i) financial promotion refers to investment:. In such a case, the financial promotion must still include the appropriate risk warning referred to in
Direct offer financial promotions
In such a case, the financial promotion must still include the appropriate risk warning referred to in may include, without limitation, mandatory disclosures applicable to that company such as those set out in ■COBS 18.12.24R to ■COBS 18.12.28R, including information. approximately:. a) the identity of the borrower(s); A firm may make or approve a direct offer of financial promotion in connection with a limited mass market investment to or for communication with a retail client if:
First condition: cooling off period
Second condition: personalised risk warning
Third condition: categorisation
Where the direct offer financial promotion will relate to more than one type of limited mass market investment, the condition in ■COBS 4.12A.21R may be satisfied by the retail customer signing a combined statement meeting the requirements in ■COBS 4 Appendix 2Rto■COBS . 4 Schedule 5R, as applicable, in respect of each type of limited mass market investment to which the direct offer financial promotion will relate. Where the limited investor statement (■COBS 4 Schedule 5R) refers to s. limited investor who invests no more than 10% of their net assets, this refers to the retail client's total investment across all types of limited mass market investments.
Fourth condition: appropriateness
This rule applies when a limited investment in the mass market has been deemed unsuitable for a particular retail investor. based on two consecutive evaluations. When gathering information regarding the knowledge and experience of a small client for the purpose of evaluating whether a limited mass market investment is suitable for that small client, business or person.
Requirements of risk warnings and non-digital risk summaries
Requirements of digital personalised risk warnings and digital risk summaries
Risk summaries
B Promotion of non-mass market investments
In addition to the persons listed in ■COBS 4.12B.1R, persons (including unauthorized persons) who benefit from a temporary exemption or exclusion from the general prohibition under:.
Purpose and overview of the rules
Promotion of non-mass market investments
Exemptions from the restrictions on the promotion of non- mass market investments
Securities offered by the existing investment or that is not a pooled investment that passes as part of a rights issue. Write- A person who invests and is entitled to whom such an agreement is.
Advice and preliminary assessment of suitability
This is the case even if the firm will carry out a MiFID activity at the same time or after the promotion.). A firm may communicate an invitation or inducement to participate in an unregulated collective investment scheme without breaching the promotion restriction in section 238 of the Act if the promotion falls within an exception in the table in ■COBS 4.12B.7R(5) and is in accordance with.
Promotions to certified high net worth investors, certified sophisticated investors or self-certified sophisticated investors
Promotions for Certified High Net Worth Investors, Certified Sophisticated Investors or Self-Certified Sophisticated Investors. a) the firm has a valid reason for any change; Prerequisites for communicating with Certified High Net Worth Investors, Certified Sophisticated Investors, or Self-Certified Investors.
Prior conditions for communication to certified high net worth investors, certified sophisticated investors or self-certified
Preconditions for Communication to Certified High Net Worth Investors, Certified Experienced Investors or Self-Certified Investors. i) exit the investment path; or. ii) continue to receive the financial promotion. This rule does not apply to a financial promotion of a closed-end investment fund that applies for or has a premium listing and that meets the requirements of■LR 15. 1) The second condition applies if a retail Client requests a financial promotion of a non-mass market investment (including securities in a closed-end mutual fund applying for or belonging to a premium listing and meeting the requirements of■LR 15).
Risk warning to be included in the financial promotion
Even where it is not possible to provide a risk warning in a durable medium (for example because the financial promotion is a real-time financial promotion), the recipient of the financial promotion must still be provided with an appropriate risk summary in a durable medium at or around the time the financial promotion is communicated (■COBS 4.12B.21R(4)). Requirements of risk alerts and non-digital risk summaries. a) be prominent, taking into account the content, size and orientation of the financial promotion as a whole;.
Further requirement to include a statement of costs, charges and commission where the financial promotion relates to
For the purposes of■COBS 4.12B.30R, design features that may reduce the visibility or prominence of a personalized hazard warning or hazard summary include, but are not limited to:. The expense breakdown statement in ■COBS 4.12B.33R(3) should be clearly and conspicuously included in the financial promotion.
Definition of sophisticated and high net worth investors
The purpose of the statements required by ■COBS 4.12B.33Ris to enable an investor to determine the proportion of capital raised by an issue of a. speculative illiquid security that will not be invested. Where the financial promotion relates to more than one type of non-mass market investment, the retail client may sign a combined statement that meets the requirements in ■COBS 4 Schedule 2Rto■COBS 4 Schedule 4R, as applicable, in respect of each type of non-mass market investment to which the financial promotion will relate.
Sophisticated and high net worth investors: guidance on certification by authorised person and reliance on self-
In particular, the company should consider whether the promotion of non-mass market investments is in the customer's interest and whether it is reasonable to make the promotion to that customer on the basis of self-certification. A retail client who meets the criteria for a Self-Certified Sophisticated Investor but not a Certified Sophisticated Investor may be unable to properly understand and assess the risks of a non-mass market investment.
One-off promotions
However, in exceptional circumstances, the retail client may have acquired the necessary knowledge through means other than his own investment experience, for example, if the retail client is a professional with several years of experience designing, operating or trading complex investments , for example. such as options, futures, contracts for differences or non-mass market investments.
Qualified investor schemes
Firms should note that, in the FCA's view, promoting units in a qualified investor scheme to a retail client who is not a certified sophisticated investor or a self-certified sophisticated investor is not likely to be appropriate or in that client's best interests don't be
Long-term asset funds
Electronic documents
Definition of speculative illiquid security
For the purposes of■COBS 4.12B.50R, and notwithstanding the exemption for readily realizable securities in■COBS 4.12B.54R(3)(d), a debenture is also a speculative illiquid security if:. A debenture or preference share is not a speculative illiquid security where one or more of the exemptions in (1), (3) or (4) below apply. a) the issuer or a member of the issuer's group uses the proceeds of the issue for the purpose of the activities in■COBS 4.12B.50R(2)(c) (purchase or acquisition of investments other than specified . investments) , (d) ) (purchase of immovable property or an interest in immovable property) or (e) (paying for or funding the construction of immovable property); and.
Guidance on general commercial or industrial purpose
UCITS
Marketing communications relating to UCITS schemes
This section applies to a company in relation to a communication to a customer, including an excluded communication, i.e. a marketing communication within the meaning of the UCITS Directive.
Marketing communications relating to a feeder UCITS
4.14 [deleted]
4Risk summaries
Even if the business you invest in is successful, it will probably take several years to get your money back. Even if the business you invest in is successful, it may take several years to get your money back.
4Certified high net worth investor statement
4Certified sophisticated investor statement
4Self-certified sophisticated investor statement
4Restricted investor statement
