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 document is provided for PRIIPs
Packaged retail and insurance-based investment products.
Key information document (KID)
What document is to be provided for a collective investment scheme
Key investor information document (KIID)
What document must be provided for a NON-PRIIP packaged product
A key features document (KFD)
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
How many days is the cancellation period for general insurance
14 days
30 days for pure protection and PPI
What is the Mortgage Credit Directive (MCD)
Rules which relate to the conduct of first and second charge mortgages
