2.3) Information Requirements

Question 1

COBS 2.2

Answer 1

COBS 2.2 sets out the high-level disclosure requirements

Question 2

Firms: appropriate information

Answer 2

Firms carrying in MiFID business, or equivalent third county business, must provide retail clients and professional clients (as well as potential retail clients and professional clients) with appropriate information in a comprehensible form

Question 3

Retail / Professional Clients: appropriate information in a comprehensible form

(Part 1)

Answer 3

• the firm and its services
• designated investments and proposed investment strategies, including appropriate guidance on, and warnings of, the risks associated with investments in those designated investments or in respect of particular investment strategies
• whether methodologies for assessing the risk that a customer is willing and able to take with their money are fit for purpose, including the use of risk-profiling tools

Question 4

Retail / Professional Clients: appropriate information in a comprehensible form about:

(Part 2)

Answer 4

• whether the descriptions firms use to reflect and check the level of risks a customer is assessed as being willing and / or able to take are fair, clear and not misleading
• whether process for for choosing investments results in selections that are suitable for the risk a customer is willing and / or able to take, including the use of asset allocation tools
• execution venues
• costs and associated charges

Question 5

Retail / Professional Clients: information in a comprehensible form

(Purpose)

Answer 5

This enables the client to be able to reasonably understand the nature and risks of the service and of the specific type of designated investments which are being offered, and therefore enable the client to take relevant investment decisions on an informed basis

(Firms carrying on non-MiFID business with or for a retail client in relation to derivatives, warrants or stock lending activity must also provide the information detailed above)

Question 6

COBS 6.1 / COBS 14

Answer 6

These high-level rules are expanded in COBS 6.1 in relation to information about the firm

And in COBS 14 in relation to information about products

(In general terms, for non-MiFID business the disclosure requirements apply to retail clients and for MiFID business the disclosure must be also be provided to professional clients as well)

Question 7

General information if relevant.

Information about the firm: Part 1

Answer 7

A firm must provide retail clients, professional clients and ECPs(as well as potential retail clients, professional clients and ECPs) with the following general information, it relevant:

• the name and address of the firm, including the contact details necessary to enable the client to communicate effectively with the firm
• in respect of MiFID business or equivalent third country business, the languages in which the client may communicate and receive documents and other information from the firm
• the methods of communication to be used between the firm and the client, including those for the sending and reception of orders

Question 8

General information if relevant.

Information about the firm: Part 2

Answer 8

• a statement of the fact that the firm is authorised and the name and contact details of the competent authority enabling it
• if the firm is acting through an appointed representative or, where applicable, a tied agent, a statement detailing this fact, specifying in which EEA state the appointed representative or tied agent is registered is required
• the nature, frequency and timing of reports on performance of the service provided by the firm to the client, in accordance with the rules on reporting to clients on the provision of services (COBS 16)
• information about the firm’s conflict of interest policy, including the manner in which the firm will ensure fair treatment of the client and that further details are available on request

Question 9

Information Requirements Relating to managing investment (Part 1)

Answer 9

A firm that manages investments for a client must establish an appropriate method of evaluation and comparison, such as a meaningful benchmark, based on the investment objectives of the client and the types of investment included in the clients portfolio, to enable the client to asses the firm’s performance