11. FCA Conduct of Business Rules (COBS) Flashcards
What is the purpose of the Conduct of business rules (COBS)
Sets out detailed rules for how staff and representatives of regulated businesses deal with clients
What are the 3 types of clients that the COBS deal with
Retail clients
Professional clients
Eligible counterparties
Example of real time promotion
Face to face
Telephone call
What must firms provide to a retail client before conducting business
Client agreement (Terms of Business)
What’s is the ‘know your customer’ rule
Firm must have sufficient personal and financial Information before making investment recommendations
What is meant by the principle of best execution
What firms must apply when they deal with buying and selling stocks and shares on behalf of the customer
What are execution-only transactions
Where investor states exactly what they want and doesn’t ask for advice
What is a PRIIP
Packaged retail and insurance-based investment products.
FCA rules require Key information document (KID) to be provided
When does a KIID need to be provided
Key investor information document
For a collective investment scheme
What must be provided for a NON-PRIIP packaged product
A key features document
Under the COBS which records can be kept indefinitely
Pension transfers
Pension opt-outs
FSAVC’s
Under the COBS which records can be kept for 5 years
Life policies
Pension contracts
What happens to interest on client money
Belongs to the client
Who does the ICOBS apply to
Non-investment insurance advice.
What does the Mortgage Credit Directive (MCD) provide
7 day reflection period and requires adequate explanations
