COBS 4—Direct offers and cold calls
COBS 4—Direct offers and cold calls

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

  • COBS 4—Direct offers and cold calls
  • Application of the FCA’s direct offer promotion rules
  • What is a direct offer promotion?
  • Prescribed content
  • MiFID equivalent third-country or optional exemption business
  • Non-MiFID equivalent third-country or optional exemption business
  • Where and when must information be disclosed?
  • Additional content
  • Direct offers and suitability or appropriateness
  • Direct offers and distance marketing
  • More...

This Practice Note explains what direct offer financial promotions and cold calls are and which of the Financial Conduct Authority's (FCA) rules apply to them.

Application of the FCA’s direct offer promotion rules

The FCA’s direct offer financial promotion rules are set out in chapter 4.7 of the Conduct of Business Sourcebook (COBS 4.7). Following the implementation of the recast Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II) and Markets in Financial Instruments Regulation (Regulation (EU) 600/2014) (MiFIR), there are different provisions, depending on whether a firm is carrying on MiFID, equivalent third country or optional exemption business or not.

In broad terms:

  1. COBS 4.7.-1AEU is relevant to a firm communicating a direct offer financial promotion in relation to its MiFID, equivalent third country or optional exemption business; and

  2. COBS 4.7.1R is relevant to a firm communicating a direct offer financial promotion that does not relate to its MiFID, equivalent third country or optional exemption business. The rule also may apply to a MiFID investment firm, third country investment firm or MiFID optional exemption firm where it makes a direct offer financial promotion which is not a marketing communication, or which does not relate to its MiFID, equivalent third country or optional exemption business

The requirements in COBS 4.7.1 do not apply in relation to:

  1. excluded communications

  2. a prospectus advertisement to which PR 3.3 applies

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