Application of the FCA's COBS 4 rules
Application of the FCA's COBS 4 rules

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • Application of the FCA's COBS 4 rules
  • What do the rules in COBS 4 apply to?
  • Type of business
  • Who do the rules apply to?
  • Type of client
  • MiFID, equivalent third country or optional exemption business
  • Diagrams for application of COBS 4
  • Territorial scope of COBS 4
  • Interplay with EU law
  • Exemptions from COBS 4
  • More...

Chapter 4 of the Financial Conduct Authority's (FCA) Conduct of Business sourcebook (COBS 4) contains the conduct of business requirements for communications (including financial promotions) made by authorised firms to their clients.

This Practice Note explains how COBS 4 applies to firms in the UK and will help such firms to establish whether the rules apply to them and in what circumstances.

What do the rules in COBS 4 apply to?

The rules in COBS 4 apply to authorised firms which communicate or approve financial promotions.

Type of business

It is the type of business which a firm carries out which will determine exactly which rules apply. For instance, there are specific provisions which apply to firms subject to the recast Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II) and Markets in Financial Instruments Regulation (Regulation (EU) 600/2014) (MiFIR) who are communicating material in relation to their MiFID, equivalent third country or optional exemption business (see MiFID, equivalent third country or optional exemption business section below).

COBS 4 covers all designated investment business communications with clients. The rules do not apply to the communication or approval of promotions relating to:

  1. qualifying credit (as defined in Schedule 1 paragraph 10 (Providing qualifying credit) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, SI 2005/1529 (FPO)), home purchase plans and home reversion plans. The financial

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