Please enable JavaScript.
Coggle requires JavaScript to display documents.
COBS AND CASS Part 2, image, image, image, Past performance:
Must not…
COBS AND CASS Part 2
-
Communicating with clients: All clients Communication media:
- Unwritten communications
- Written communications
• Communications with clients
- Fair, clear and not misleading
- Identifying promotions as such
• Firms must ensure that financial promotions are clearly identifiable as such
Applies when making any communication or claim regarding sustainability
characteristics, ensuring claims are:
- Consistent with sustainability features of the product
- Fair clear and not misleading
- Consistent with consumer duty requiring to act in good faith
Social Media Firms are responsible for all promotions, including those on social media
• Firms responsible for ensuring ‘influencers’ that they work with communicate to their
followers in the right way
• Influencers promoting financial products without approval from an FCA firm could be
committing a criminal offence under s21 FSMA
Retail clients:
Firms must ensure:
- Name of the firm
- Detials are accurate and fair
- It is comprehensible
- The promotion does not obscure important items, statements or warnings
• Particular focus on ‘Capital at risk’ product
Fair, clear and not misleading
- Amplifies Principles for businesses 12
-
Approval of financial promotions: Before a firm approves a financial promotion it must confirm that it complies
with the relevant regulations
• A firm that communicates a financial promotion produced by a third party would
never be in breach of the rules if:
- It has established that an authorised firm has approved the promotion
- It communicates the promotion only to those it was intended
- The promotion has not ceased to be fair, clear and not misleadin
- FPO
- Suject to not within the UK
- Subject to the takeover panel
- Personal quote
-
-
-
Past performance:
- Must not be the most prominent feature
- Cover at least five years (or life of investment) in complete 12-month periods
- Reference periods and sources must be clearly shown
- State this is not an indicator of future performance
- If relevant, currency stated and warning of currency risk provided
- Disclose effect of fees and commissions if gross performance shown
Simulated performance: Must comply with the above and be actual performance of similar index Future: Future performance
- Must not to be based on simulated past performance
- Assumptions must be reasonable
- Disclose effect of fees and commissions
- Warn that forecasts are not reliable indicator
-
-
-
A financial promotion that contains a method of response for the client to invest
in a product
- For example, an application for
- Must contain sufficient information that a decision can be made:
- Information about the firm and its services
-Safekeeping of clients money
cost and charges
- dditional appropriate information to allow an understanding of the nature and risks of
the investment (non-MiFID business only)
-
-
-
• Minimum specified information about a financial product
• A right to cancel
- 30 days Pension or life policy
- 14 days if ISA
-
All unwritten promotions (both solicited and unsolicited):
• Must be fair, clear and not misleading
• Must identify:
- The caller
- Their employer
- The purpose of the call
• Ask whether the client wishes to continue with the call, and terminate it if
requested to do so
• Provide client who has an appointment with contact point in the event of a
cancellation
• Communicate at an appropriate time of day
-
All retail clients where the promotion relates to:
- Generally marketable packaged product (not a high volatility fund)
- Services relating to readily realisable securities other than warrants
Information disclosure: All clients
- Firms must disclose:
- Name of firm
- Method and language of communication
- Periods of reporting
- If it is acting through an appointed representative
- If a common platform firm the conflicts of interest policy
- A firm must disclose all this in the IDD (Initial disclosure document) before engaging in business
- Additionally, all customers must be provided with a formal ‘client agreement’
- Sets out the essential rights and obligations of the firm, and of the customer
-
-
Retail Distribution Review: Retail clients
- Firms are either independent or restricted
- Remuneration: Advisor charges must be agreed as early as 'practicable through a durable medium or website"
- No commissions from the product provider permitted
- Clients can choose either to pay the adviser charge upfront or have it deducted from their
investment over time
- Disclosure
- Must disclose adviser status, and the costs of the service before:
• Providing a service; or
• The client is bound by any agreement
-
-
-
-
