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

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

  • COBS 4—Past, simulated past and future performance
  • Client communications: past performance
  • Packaged products that are not financial instruments
  • Client communications: simulated past performance
  • Client communications: future performance

BREXIT: 11pm (GMT) on 31 December 2020 (‘IP completion day’) marked the end of the Brexit transition/implementation period entered into following the UK’s withdrawal from the EU. Following IP completion day, key transitional arrangements come to an end and significant changes begin to take effect across the UK’s legal regime. This document contains guidance on subjects impacted by these changes. Before continuing your research, see: Brexit and financial services: materials on the post-Brexit UK/EU regulatory regime.

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

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