COBS 4—Past, simulated past and future performance
COBS 4—Past, simulated past and future performance

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

  • COBS 4—Past, simulated past and future performance
  • Client communications: past performance
  • Client communications: simulated past performance
  • Client communications: future performance

This Practice Note explains the regulatory rules for the use of performance information in client communications (contained in the Financial Conduct Authority (FCA)'s Conduct of Business sourcebook (COBS) at COBS 4.5A.10–COBS 4.5A.16 (MiFID provisions) and COBS 4.6 (non-MiFID provisions)). The rules relate to three types of information:

  1. past performance information

  2. simulated past performance information, and

  3. future performance information.

Following amendments to COBS 4 made as a result of the implementation of the recast Markets in Financial Instruments Directive (Directive 2014/65/EU) (MiFID II) and the Markets in Financial Instruments Regulation (Regulation (EU) 600/2014) (MiFIR) (together the MiFID II Framework). The rules on performance apply differently depending on whether firms are carrying out MiFID, equivalent third country or optional exemption business or non-MiFID, equivalent third country or optional exemption business.

For MiFID, equivalent third country or optional exemption business, the rules in COBS 4.5A.10–COBS 4.5A.16 apply to all information provided to clients (save that the requirements don’t apply in relation to information which is a third party prospectus or is image advertising.

For non-MiFID, equivalent third country or optional exemption business the rules in COBS 4.6 apply to the communication and approval of financial promotions (save that the requirements don’t apply in relation to excluded communications, prospectus advertisements to which PR 3.3 applies, image advertising, deposits that are not a structured deposits and pure protection contracts that